Fed Maintains 3.5–3.75% With a 4-Vote Split: Powell’s Final Decision During His Tenure

The U.S. Federal Reserve (Fed) decided at its April 29 FOMC meeting to keep the benchmark interest-rate range at 3.50–3.75% unchanged, in line with market expectations. In its official statement, the Fed also revealed clear internal disagreement—of the 12 voting members, 4 voted against, coming from different positions: Governor Stephen Miran argued for a 1-basis-point rate cut, while Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan all supported holding rates steady but opposed the statement by adding language that leaned dovish. The meeting is expected to be the last policy meeting during Jerome Powell’s tenure as Fed chair, which ends on May 15.

Decision: 8-4 vote, explicitly pointing to energy driving inflation

In its statement, the Fed described current inflation as “elevated, in part reflecting the recent increase in global energy prices” and said the jobs situation has been “job gains have remained low,” while the unemployment rate was “little changed.” In the forward guidance, it largely kept the standard wording about “carefully assessing incoming data, changes in the outlook, and the balance of risks,” and emphasized being “prepared to adjust monetary policy when risks emerge.” This meeting did not release the latest Economic Projections (SEP) and the dot plot—two items published only at the four quarterly meetings in March, June, September, and December.

The structure of the 4 dissenting votes needs to be viewed separately: Miran was the only dissenter advocating for looser policy, and his stance is dovish. Hammack, Kashkari, and Logan, although they supported keeping rates unchanged, expressed dissatisfaction with the statement’s wording that hinted at the possibility of a more accommodative shift in the future, placing them in the hawkish camp. In other words, the FOMC currently faces pressure from both sides regarding the next step—making the signals about whether rates will be cut next time even less clear than in several previous meetings.

Powell press conference: energy, Middle East, the pace of rate cuts, succession

In the press conference, Powell used cautious language about the link between energy prices and inflation: “Higher energy prices will push up overall inflation, but it is still too early to assess the magnitude and duration of that impact on the economy.” This phrasing did not frame the oil-price impact as a one-off event, nor did it treat it as a new source of long-term inflation, leaving room for continued observation.

On the Middle East situation, Powell’s stance matched the statement: “There is uncertainty about the impact of the Middle East situation on the U.S. economy, and we will continue to monitor bilateral risks.” Here, “bilateral” refers to the jobs and prices in the Fed’s dual mandate.

On the pace of rate cuts, Powell again reiterated the Fed’s long-standing position—“Monetary policy is not on a preset course and we’ll make our decisions on a meeting by meeting basis.” The market had originally expected Powell to provide more explicit guidance on the timing of cuts, but this answer showed that the Fed does not plan to tie the hands of the successor at the final meeting.

Regarding his own staying or leaving, Powell provided two layers of answers. First, on process: “If my successor is not confirmed before the end of the term for which I serve as chair, I will serve as chair pro tem until he is confirmed.” Second, on whether he would continue as a governor: “I will make decisions in the way that is most beneficial to the institution and to the people we serve.” Powell did not explicitly rule out the possibility that he could continue serving as a governor after stepping down as chair until his original term ends in 2028.

Warsh succession: a party-split vote of 13-11 passes, a full-chamber showdown the week of 5/11

On the same morning as the FOMC meeting, the Senate Banking Committee advanced Kevin Warsh’s nomination for Fed chair with a vote of 13 in favor and 11 against, sending it to the full Senate for a vote. All 13 Republicans voted yes, and all 11 Democrats voted no—this was the first time in the committee’s history that a Fed chair nomination vote resulted in a completely party-line split. One key factor enabling the vote to move forward was that, on April 24, District of Columbia U.S. Attorney Jeanine Pirro announced the end of the investigation into Powell, and Republican Senator Thom Tillis stated his support for Warsh to move to the next stage.

Next steps: the full-chamber vote is expected to take place during the week of May 11; if it passes smoothly, Warsh could complete the succession before May 15, when Powell’s term ends. If he cannot complete the process within the time frame, Powell would serve as chair pro tem until Warsh is confirmed.

For markets, the message from this meeting is: In an environment where risks related to energy and the Middle East are intensifying, the Fed chose to wait temporarily; there is no clear internal consensus on the future direction. In Powell’s final decision of his tenure, the Fed did not pre-set a direction for the successor. While there is no immediate obstacle to Warsh’s succession, the full-chamber vote process still needs to be completed.

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