Live Updated 2026-04-29T18:00:31.392Z
It's the third Fed day of the year — and it's set to be Jerome Powell's swan song.
The Federal Open Market Committee announced it would hold rates steady, marking the third hold in a row. Powell's term ends on May 15, making this meeting his last, pending the confirmation of Kevin Warsh, Trump's nominee to be the next Fed chair. The meeting also comes amid a new development in the Department of Justice probe into the Fed's construction efforts on its DC buildings, a continued stalemate in the Strait of Hormuz, and ongoing inflation woes.
Business Insider will cover the news all day, including highlights from Powell's press conference starting at 2:30 ET. Check back here for updates.
The Fed holds rates steady
The Fed will keep its benchmark interest rate steady between 3.5 and 3.75%, in alignment with expectations. It's the third consecutive rate hold from the committee. Powell will soon begin a press conference to discuss.
What reporters are watching for
Beginning at 2:30 p.m. EST, Powell will begin the Fed's April press conference with an overview of the committee's economic outlook. He will emphasize both inflation and the job market.
The central bank head will then take questions from journalists. We expect Powell will be asked about AI, the jobs landscape, consumer prices, the Iran war, Warsh's confirmation, the recently-dropped DOJ probe, and his own legacy as chair.
Tenuous optimism
Powell's FOMC began the year with cautious economic optimism and a more positive employment outlook than they held in 2025. With the Iran war and continued job market woes, this positive attitude has slipped — but not all is doom and gloom. Unemployment remains relatively low, and job gains recovered in March after a dismal February report.
Economic activity has been "expanding at a solid pace," and consumer spending has been "resilient," Powell said at the March meeting. Wednesday's decision — and the committee's reasoning — will give an important window into America's overall financial stability.
Looking ahead
In projections, the FOMC has penciled in one rate cut for 2026, which could change based on economic conditions. Powell often says "policy is not a preset course," but he has set a precedent for frequent and transparent forecasts of Fed decisions.
Warsh, on the other hand, told senators, "I don't believe in forward guidance." If confirmed, Warsh might change how the Fed communicates decisions and quarterly projections — but it's unclear what his new framework style would look like.
How the Fed impacts consumers
Over time, Fed decisions shape mortgages, credit card interest rates, business loans, and the return rates on high-yield savings accounts.
Stephen Kates, a financial analyst at Bankrate, said the Fed's likely decision to keep interest rates as is means borrowing rates aren't budging. "We're not going to see lower rates on credit cards or home equity lines of credit," he said. "Anything that's going to be tied to short-term interest rates isn't necessarily going to move. That's not a bad deal for savers."
Over time, Fed decisions shape mortgages, credit card interest rates, business loans, and the return rates on high-yield savings accounts.
Stephen Kates, a financial analyst at Bankrate, said the Fed's likely decision to keep interest rates as is means borrowing rates aren't budging. "We're not going to see lower rates on credit cards or home equity lines of credit," he said. "Anything that's going to be tied to short-term interest rates isn't necessarily going to move. That's not a bad deal for savers."
Higher rates under Powell have also had an effect on the job market. If it costs companies more money to operate, they have fewer funds available to pay staff, contributing to hiring freezes and layoffs — which we've seen across Big Tech and other white-collar fields.
The Fed and AI
AI's rapid reshaping of the economy and the job market has presented a challenge for the Fed. Powell has taken a day-by-day approach, but hypothesizes that AI will create jobs, even as it makes others obsolete.
Warsh is even more bullish, telling senators at his confirmation hearing that data center investment and changes in the job market from new technology will boost the economy.
AI's rapid reshaping of the economy and the job market has presented a challenge for the Fed. Powell has taken a day-by-day approach, but hypothesizes that AI will create jobs, even as it makes others obsolete.
Warsh is even more bullish, telling senators at his confirmation hearing that data center investment and changes in the job market from new technology will boost the economy.
"Something that I really do believe is that AI is a testament to American ingenuity," Warsh said. "The United States is the best-positioned country in the world to take advantage of it so that the US economy and US workers benefit from it."
Goldman predicts the path of Fed policy under Warsh
Goldman Sachs vice chairman Robert Kaplan said on a company podcast that he expects Kevin Warsh to argue that the central bank should be focused not on the next three to six months, but on the longer-term horizon in deciding the path of monetary policy.
He sees AI disinflation as a likely point of focus and adds that he expects to see Warsh cite the productivity improvements of the 1990s under Alan Greenspan's Fed.
Goldman Sachs vice chairman Robert Kaplan said on a company podcast that he expects Kevin Warsh to argue that the central bank should be focused not on the next three to six months, but on the longer-term horizon in deciding the path of monetary policy.
He sees AI disinflation as a likely point of focus and adds that he expects to see Warsh cite the productivity improvements of the 1990s under Alan Greenspan's Fed.
That said, he also thinks the Fed's policy-making committee will want to see clear evidence that inflation is moving near their target after missteps in recent years, and that this may pose challenges for Warsh."They want to be risk managers, not prognosticators, so there's going to be a debate, and he's going to have to contend with that," Kaplan said.
Word on Wall Street
Business Insider's William Edwards asked market pros about Powell's legacy on Wall Street. The verdict was mixed.
Some experts said Powell has done an excellent job handling pressure from the Trump administration, and will be remembered as a staunch defender of central bank independence. Others said he was instrumental in the US' economic recovery from the pandemic. A few feel that he let inflation rates get out of control, and cut interest rates too much in 2024 — which has made it difficult to handle 2026 surges in oil prices.
What economists and analysts are saying
Stephen Kates, a financial analyst at Bankrate, said there are some bright spots in the job market, so the Fed likely will pay more attention to the inflation side of the Fed's dual mandate.
It's possible the Fed won't lower rates this year, Kates said, but Warsh could spark a change in direction. "This is a committee decision," he added. "It's not a one-man operation. He'd have to have the agreement of his colleagues if interest rates are going to be coming down."
Stephen Kates, a financial analyst at Bankrate, said there are some bright spots in the job market, so the Fed likely will pay more attention to the inflation side of the Fed's dual mandate.
It's possible the Fed won't lower rates this year, Kates said, but Warsh could spark a change in direction. "This is a committee decision," he added. "It's not a one-man operation. He'd have to have the agreement of his colleagues if interest rates are going to be coming down."
Mark Zandi, chief economist at Moody's Analytics, said that there is too much uncertainty with inflation and the Iran war for the Fed to make a move. It also means Warsh is stepping into a tough job: "It's not going to be an easy job, but he's got the skills and experience necessary to succeed," Zandi said. "But he's got some big shoes to fill because Powell navigated lots of different shocks in a very graceful and humble way."
Wealthiest Fed chair in history
Warsh's financial disclosures show he is worth well over $100 million — which would make him the wealthiest Fed chair in history. He is also married to Jane Lauder, a member of the billionaire family behind the cosmetics giant Estée Lauder.
Last year, Warsh earned money through consulting, speaking gigs, and investments in the prediction platform Polymarket, according to his disclosures. Some of his investments remain undisclosed, which he said is for confidentiality reasons. He has two assets in the Juggernaut Fund, LP worth at least $60 million each, alongside 60 assets worth $22 million each associated with THSDFS LLC.
At his confirmation hearing last week, Sen. Elizabeth Warren asked Warsh if any of these investments are tied to Trump business interests or the Epstein estate. The nominee did not answer directly, but said he has made an agreement with the Office of Government Ethics to divest any conflicts within 90 days of confirmation.
A change in approach
Powell is known for his cautious approach to monetary policy, often voting for rate hikes and holds to avoid driving inflation upward. His top priority has often been risk management in the face of the pandemic, tariffs, and geopolitical conflicts.
Warsh also said he's tough on inflation, but he may be more primed to cut rates, as Trump has frequently asked for. At last week's hearing, Warsh said he would be less sensitive to news events, holding a more long-term view on rates.
Powell is known for his cautious approach to monetary policy, often voting for rate hikes and holds to avoid driving inflation upward. His top priority has often been risk management in the face of the pandemic, tariffs, and geopolitical conflicts.
Warsh also said he's tough on inflation, but he may be more primed to cut rates, as Trump has frequently asked for. At last week's hearing, Warsh said he would be less sensitive to news events, holding a more long-term view on rates.
This would be unlike previous Fed chairs. As economist Claudia Sahm wrote in her April 28 newsletter, "Warsh's calls for regime change, if successful, would roll back twenty years of innovations in monetary policy at the Fed: [Ben] Bernanke's development of unconventional monetary policy (balance sheet and forward guidance), [Janet] Yellen's advancement of the maximum employment mandate, and Powell's risk management under supply shocks."
Warsh is one step away from confirmation
On Wednesday morning, senators on the Committee on Banking, Housing, and Urban Affairs gathered in Washington, DC to vote on Warsh's nomination. He was advanced along party lines — 13 in favor and 11 against — and will proceed to the full Senate confirmation vote.
Warsh's confirmation wasn't always a sure thing. The DOJ probe raised alarm among lawmakers about political interference with the Fed, especially as Trump has been vocal about wanting lower rates. Sen. Thom Tillis, a North Carolina Republican, previously said he would not support any Trump nominees for the Fed position until the DOJ probe was dropped, putting Warsh's confirmation at risk.
On Wednesday morning, senators on the Committee on Banking, Housing, and Urban Affairs gathered in Washington, DC to vote on Warsh's nomination. He was advanced along party lines — 13 in favor and 11 against — and will proceed to the full Senate confirmation vote.
Warsh's confirmation wasn't always a sure thing. The DOJ probe raised alarm among lawmakers about political interference with the Fed, especially as Trump has been vocal about wanting lower rates. Sen. Thom Tillis, a North Carolina Republican, previously said he would not support any Trump nominees for the Fed position until the DOJ probe was dropped, putting Warsh's confirmation at risk.
But the formal end of the criminal probe alleviated the key senator's concerns. On Wednesday, Tillis said, "I want to thank the Department of Justice for he assurance they gave me" he said, adding that "they have a matter that they want to settle and that's fine with me. I am confident this investigation is over."
Senator Elizabeth Warren told the committee on Wednesday that the vote puts Trump "one step closer to completing his illegal attempt to seize control of the Fed and to artificially juice the economy."
The DOJ investigation saga
On April 24, US Attorney Jeanine Pirro dropped the Department of Justice Probe into Jerome Powell. The department launched the probe in January over Powell's alleged mishandling of construction funds at the central bank's Washington DC buildings.
At the time, Powell posted a video online, saying that "No one — certainly not the chair of the Federal Reserve — is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure."
On April 24, US Attorney Jeanine Pirro dropped the Department of Justice Probe into Jerome Powell. The department launched the probe in January over Powell's alleged mishandling of construction funds at the central bank's Washington DC buildings.
At the time, Powell posted a video online, saying that "No one — certainly not the chair of the Federal Reserve — is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure."
It has been the second major legal hurdle for the Fed this year, the first being Trump's mortgage fraud allegations against Governor Lisa Cook, a case that rests with the Supreme Court.
Stocks dip ahead of Fed meeting, as oil rises and earnings loom
The stock market is on edge ahead of the Fed meeting. With markets pricing in near-certainty that rates will remain unchanged, investors are looking to other catalysts.
Oil is on a multi-day rise back toward Iran-war highs, with Brent crude topping $116 a barrel. Meanwhile, Big Tech earnings loom. Meta, Amazon, Microsoft, and Alphabet all report after the bell on Wednesday.
The stock market is on edge ahead of the Fed meeting. With markets pricing in near-certainty that rates will remain unchanged, investors are looking to other catalysts.
Oil is on a multi-day rise back toward Iran-war highs, with Brent crude topping $116 a barrel. Meanwhile, Big Tech earnings loom. Meta, Amazon, Microsoft, and Alphabet all report after the bell on Wednesday.
The S&P 500 was down 0.2% shortly after the open, and the Dow was down nearly 300 points.
A highly anticipated succession
Kevin Warsh, Trump's pick for the next Fed chair, is a former Wall Street executive and central bank governor. He has a reputation for being tough on inflation, with a hawkish attitude toward monetary policy.
At his confirmation hearing with the Senate Committee on Banking, Housing, and Urban Affairs, Warsh showed optimism about AI growth and a commitment to Fed independence. The committee is set to vote on, and likely approve, Warsh's nomination later this morning.
Kevin Warsh, Trump's pick for the next Fed chair, is a former Wall Street executive and central bank governor. He has a reputation for being tough on inflation, with a hawkish attitude toward monetary policy.
At his confirmation hearing with the Senate Committee on Banking, Housing, and Urban Affairs, Warsh showed optimism about AI growth and a commitment to Fed independence. The committee is set to vote on, and likely approve, Warsh's nomination later this morning.
"Fed independence is up to the Fed," Warsh said at the hearing. "That has three implications: First, Congress is tasked with the mission to ensure price stability. Inflation is the Fed's choice. Second, Fed independence is at its peak in the conduct of monetary policy. And third, the Fed must stay in its lane."
What's at stake
Wednesday's meeting signals the end of the Powell era, before the likely next chair Warsh makes his own mark on US monetary policy.
The Fed's response to Iran war oil price shocks and ongoing political pressure from the Trump administration will have a ripple effect on American borrowers — from homeowners, to small business owners, to credit card holders. A hold could help keep inflation in check, but keep borrowing costs high.
Inflation outlook
Inflation as measured by the consumer price index rose in March to the highest rate in two years, largely driven by higher energy prices amid the ongoing Iran war. Energy prices rose 12.5% year over year, the largest increase since November 2022.
Mark Zandi, chief economist at Moody's Analytics, warned that gas prices would likely stay high if vessel traffic is still disrupted in the Strait of Hormuz.
Inflation as measured by the consumer price index rose in March to the highest rate in two years, largely driven by higher energy prices amid the ongoing Iran war. Energy prices rose 12.5% year over year, the largest increase since November 2022.
Mark Zandi, chief economist at Moody's Analytics, warned that gas prices would likely stay high if vessel traffic is still disrupted in the Strait of Hormuz.
"We're going to be paying more than $4 for a gallon of regular unleaded, and inflation is going to continue to be a problem," Zandi said. "Even if things start flowing here quickly, prices come in a bit, I think we're in store for somewhat higher inflation over the next three to six months."
The job market looked brighter in March
The latest jobs report from the Bureau of Labor Statistics showed stronger job creation in March after the previous report showed that weather and a healthcare strike affected employment in February.
The US added 178,000 jobs in March, blowing past expectations and offsetting the 133,000 lost the month before. Healthcare and the leisure and hospitality sector had the largest gains among major industries. However, the Iran war could still have knock-on effects for the US economy down the line. Diane Swonk, KPMG's chief economist, said this doesn't reflect the full effects of "the shock to energy prices and supply chains" because of the survey's timing.
The latest jobs report from the Bureau of Labor Statistics showed stronger job creation in March after the previous report showed that weather and a healthcare strike affected employment in February.
The US added 178,000 jobs in March, blowing past expectations and offsetting the 133,000 lost the month before. Healthcare and the leisure and hospitality sector had the largest gains among major industries. However, the Iran war could still have knock-on effects for the US economy down the line. Diane Swonk, KPMG's chief economist, said this doesn't reflect the full effects of "the shock to energy prices and supply chains" because of the survey's timing.
"It tells us that what we already knew was that we entered the year with the tailwind, part of it being the catch-up to the government shutdown, part of it being fiscal stimulus, but now we're facing the headwinds of much higher energy prices," Swonk said, adding, "I would expect to see much softer job creation going forward as uncertainty has spiked again."
Powell's record
Business Insider took a look at Powell's economic record during his news-packed eight years running the Fed, which shows cautious monetary decisions, and mixed inflation and job market outcomes.
"Jerome Powell's tenure will likely be viewed favorably, offering lessons that economists can use to better inform future policy," said Stephen Kates, a financial analyst at Bankrate. "Powell has been a consensus builder within the Federal Reserve and has conducted himself with composure during periods of escalating public and legal pressure from the White House to lower rates."
Mark Zandi, chief economist at Moody's Analytics, said, "Chair Powell has done a bang-up job as chair of the Fed," navigating "massive shocks to the economy," including wars, tariffs, and changing immigration policy.
Markets ready for a busy day
With both the Fed decision and a slew of Big Tech earnings, it's set to be a busy day for markets.
All three major US indexes are set to open a little higher, with futures pointing to both the Dow and S&P 500 gaining just 0.1% at the open, and the Nasdaq set to tick 0.4% higher.
With both the Fed decision and a slew of Big Tech earnings, it's set to be a busy day for markets.
All three major US indexes are set to open a little higher, with futures pointing to both the Dow and S&P 500 gaining just 0.1% at the open, and the Nasdaq set to tick 0.4% higher.
Stocks in Europe are down on the day, though falls are largely limited. The biggest drop is in the UK, where the FTSE 100 is down roughly 0.8%.
In commodity markets, oil prices rose on Wednesday, seemingly spurred by President Donald Trump's latest threat to Iran. Early in the morning, Trump shared a Truth Social post including what appeared to be an AI-generated image of himself wearing sunglasses and holding a gun with the caption "No more Mr. Nice Guy."
Just before 7 a.m. ET, Brent crude, the international benchmark, was 2.8% higher at $107.30 per barrel, while WTI crude was up 3.3% to $103.25.
A near-guaranteed hold
As of Wednesday morning, CME FedWatch — which estimates probabilities of the Fed's choices based on market moves — is predicting a 100% chance of a rate hold. The FOMC aims to balance both sides of its dual mandate, fostering stable prices and maximum employment. Lowering rates could help thaw a frozen job market, but it carries the risk of rising inflation. It's likely the Fed will take a moderately restrictive stance, keeping rates steady alongside oil shocks from the Iran war.
The end of an era (most likely)
After holding the post since 2018, Wednesday is set to be Powell's last meeting as central bank chair. His term is officially up on May 15, and Trump nominee Warsh is likely to be greenlit by the Senate as successor. The Senate Banking Committee is scheduled to meet this morning to vote on whether or not to advance his confirmation to the full Senate.
It's rare for a chair to remain on the Federal Open Market Committee after their tenure, but Powell has hinted that he may hold on to his governor seat: "I will make that decision based on what I think is best for the institution and for the people we serve," he said last month. Powell is eligible to vote on the committee until 2028, if he were to stay.
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