Fed Holds Rates at 3.75% as Powell Exits With Record Dissent, Inflation Warning, and Vow to Remain as Governor
Key Takeaways
1, Powell confirmed his final press conference as Fed Chair and congratulated Kevin Warsh.
2. Fed held rates steady, but 4 dissenting votes marked the most division since 1992.
3. Inflation expected around 3.5%, driven by energy prices and global tensions.
4. Economic outlook described as highly uncertain, with strong spending but weak labor signals.
5.Fed may move toward a neutral policy stance in upcoming meetings
6. Powell will remain on the Fed Board after May 15 in a low-profile role.
7. He rejected the idea of being a “shadow chairman”, reinforcing Fed independence.
Jerome Powell’s final press conference as Federal Reserve Chair marked a historic and highly tense moment for global markets. He confirmed this was his last appearance in the role and congratulated Kevin Warsh as his successor, while emphasizing continuity at the Federal Reserve. Despite stepping down as chair, Powell stated he will remain on the Fed Board after May 15 in a “low-profile” capacity and clearly rejected the idea of acting as a “shadow chairman,” reinforcing institutional independence.
The Federal Reserve held interest rates unchanged, but the decision exposed rare internal fractures. The meeting saw four dissenting votes—the highest since 1992—highlighting deep divisions among policymakers over the future direction of monetary policy. Inflation concerns, policy direction, and economic uncertainty all contributed to the split, signaling a more unstable policy environment ahead.
Powell also warned that inflation remains persistent, with March PCE expected around 3.5%, driven largely by rising energy prices and geopolitical tensions. While consumer spending remains strong, he noted weakening labor demand and described the overall economic outlook as “highly uncertain,” with risks on both sides of the Fed’s manda