Fed holds rates steady amid dissents, Powell to stay after Warsh confirmed

A divided Federal Reserve left its benchmark interest rate unchanged on April 29, and Jerome Powell delivered something of a farewell address, speaking about the central bank’s independence and his role at the Fed moving forward following his final meeting as chair. 

Contending with inflationary shocks stemming from the Iran war and lingering concerns about the labor market, the Federal Open Market Committee opted to keep the federal funds rate at a range of 3.5% to 3.75%. The Fed's statement cited uncertainty "due to developments in the Middle East," elevated inflation and low job gains.

For the first time since 1992, four of 12 voting members dissented from the decision. Fed Governor Stephen Miran preferred to lower the target range by a quarter-point, as he has at previous meetings. Committee members Beth Hammack, Neel Kashkari, and Lorie Logan supported the rate decision, but opposed the inclusion of language in the statement that might imply they are leaning toward future rate cuts. 

While Powell confirmed he plans to step aside when his term as chair ends May 15, he won’t be going far. He said he welcomed news last week that the Justice Department dropped a criminal probe into him and the Fed, but that he would remain on the Fed’s Board of Governors "for a period of time to be determined."

He also offered words of support to President Donald Trump’s nominee to become his successor, Kevin Warsh, whose confirmation was advanced by the Senate Banking Committee earlier in the day. He added he planned to "keep a low profile" as a governor, adding there's only one chair and "when Kevin Warsh is confirmed and sworn in, he will be that chair."

As he wrapped the news conference, Powell thanked reporters one more time and added, to laughter from the room, "I won't see you next time."