The Fed held rates at 3.5% to 3.75%, but the real move was inside the vote: four dissents, the most since October 1992. A decision markets treated as a formality turned into a public split over whether the central bank should still be pointing toward cuts.
The fracture was unusually specific. Governor Stephen Miran wanted an immediate quarter-point cut, while Cleveland’s Beth Hammack, Minneapolis’ Neel Kashkari and Dallas’ Lorie Logan supported holding rates but opposed keeping an easing bias in the statement. Their objection centered on language saying the Fed would assess the “extent and timing of additional adjustments,” a phrase that implies the next move is lower.
- The Fed has now stood pat for three straight meetings after three cuts last year.
- Inflation remains above target, with the Fed citing higher energy prices and one report putting inflation at 3.3%.
- March payrolls rose 178,000, while unemployment slipped to 4.3%.
- Futures pricing cited in the reports points to no rate cut until well into next year.
Jerome Powell then added a governance fight to the policy split. He said he plans to remain on the Fed’s Board of Governors after his chair term ends in mid-May, waiting until the investigation into the Fed’s building renovations is “well and truly over with transparency and finality.” That would make him the first Fed chair since 1948 to stay on as a governor after leaving the top job.
The decision matters because it denies President Donald Trump an immediate board vacancy as Kevin Warsh moves toward the chairmanship. The Senate Banking Committee advanced Warsh on a party-line vote, and if confirmed he would take Stephen Miran’s seat rather than Powell’s, leaving the board balance less changed than the White House may have expected. Powell said he is “not looking to be a high profile dissident,” but his presence gives the incoming chair one more heavyweight in the room.
Warsh inherits a Fed with inflation still above its 2% target, a labor market that is cooling but not cracking, and a committee already willing to break ranks in public. The concrete marker now is timing: Powell’s chair term ends May 15, while his governor term runs until January 2028 if he chooses to stay that long.
