Fed Likely To Hold Rates as Powell's Final Meeting Nears
Fed Likely To Hold Rates as traders price a hold at the April 29 FOMC and futures push the first expected cut to late 2027, limiting 2026-cut bets.
KEY TAKEAWAYS
- Markets priced a hold at the April 28-29 FOMC with a 100% probability of no change.
- Futures priced the first possible easing for late 2027, removing 2026 cuts from pricing.
- Powell's April 29 press conference and the Fed statement are the primary near-term market catalysts.
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The Federal Reserve is expected to keep its federal-funds target at 3.50%–3.75% after its April 28–29 meeting, with Chair Jerome Powell scheduled to give his final press conference on April 29. Markets have priced out any rate cuts for 2026.
FOMC Meeting Set to Maintain Current Policy
The Federal Open Market Committee will release its policy statement at 2:00 p.m. ET on April 29, followed by Powell’s news conference at 2:30 p.m. ET. The effective federal-funds rate stood at 3.64% as of April 24.
Market-implied odds showed a 100% probability of no change as of April 28. Futures and related pricing have pushed the first expected easing to late 2027. Economists attribute this delay to rising inflation linked to the Iran war, an oil-price shock, and a bond-market selloff.
The Fed’s last rate cut occurred on December 10, 2025.
Powell’s Final Meeting and Succession Outlook
Powell’s chairmanship ends May 15, concluding eight years in the role. He may remain on the Fed’s board as a governor through February 2028. President Trump has nominated Kevin Warsh, a former Fed governor, as Powell’s successor. Warsh appeared before the Senate Banking Committee for a confirmation hearing on April 21.
With markets pricing no 2026 cuts, the Fed’s statement and Powell’s April 29 remarks will be the main near-term influences on expectations for future easing. Powell is widely expected to resist near-term cuts due to recent inflationary pressures tied to Middle East energy developments.
Forecasts diverge beyond the near term. One consultancy projects a single cut in December 2026. Moody’s economist Mark Zandi expects no cuts in 2026, emphasizing inflation expectations. J.P. Morgan economist Michael Feroli anticipates policymakers will hold through 2026, then raise rates by 25 basis points in the third quarter of 2027, with possible cuts if the labor market weakens or energy-market fallout intensifies.
