Fed Holds Rates in 11-1 Vote
Fed Holds Rates as the FOMC left the federal-funds range at 3.5%-3.75% with dissents and a looming chair change that raise near-term policy uncertainty.
KEY TAKEAWAYS
- FOMC held the federal-funds target at 3.5%-3.75%.
- Committee voted 11-1 with one member favoring a 25-bp cut and three opposing easing-bias language.
- Powell's term ends May 15 and Warsh confirmation advance raises near-term policy uncertainty.
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The Federal Open Market Committee (FOMC) left the federal‑funds target range unchanged at 3.5%–3.75% on April 29, 2026, in what could be Chair Jerome Powell’s final meeting. Officials cited persistent inflation, weak job gains, and uncertainty from developments in the Middle East as reasons for maintaining the pause.
Policy Decision and Economic Context
The FOMC statement, released at 2:00 p.m. EDT, confirmed the committee’s decision to hold rates steady. Inflation remains elevated partly due to recent increases in global energy prices. The statement noted that Middle East developments contribute to significant uncertainty about the economic outlook. Economic activity stayed solid despite low job gains and stable unemployment.
The committee retained language signaling an easing bias, indicating a preference for potential future rate cuts. It said it would continue assessing incoming data and evolving risks while remaining committed to maximum employment and a 2% inflation goal.
The vote was 11 to 1, with Stephen I. Miran dissenting in favor of a 25-basis-point cut. Three members—Beth M. Hammack, Neel Kashkari, and Lorie K. Logan—opposed including the easing-bias language in the statement, highlighting an unusual split on messaging within the committee.
This decision followed holds in January and March 2026, after three 25-basis-point cuts in September, October, and December 2025.
Leadership Transition Adds Uncertainty
Jerome H. Powell’s term as Fed chair expires on May 15, 2026. On the morning of the rate decision, the Senate banking committee advanced Kevin Warsh’s confirmation as Powell’s likely successor. The combination of the internal split, retained easing-bias language, and imminent leadership change increases uncertainty about the Fed’s near-term policy path as officials weigh fresh economic data.
"In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 3‑1/2 to 3‑3/4 percent," the statement said. It added, "Inflation is elevated, in part reflecting the recent increase in global energy prices. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook."
