Story perspectives

Fed Holds Rates, Powell’s Term Ends as Investigation Dropped

4/28/2026

Summary

Fed Holds Rates

The Federal Reserve (Fed) will keep its benchmark rate unchanged at the March 2026 meeting, maintaining the 3.5%-to-3.75% range.
Inflation stays above the 2% target, Fed Governor Christopher Waller warned high energy prices could embed higher inflation and slow activity.
Fed Chair Jerome Powell’s term ends on May 15 2026 after Justice Department dropped its criminal investigation, with Senator Thom Tillis saying he will no longer block Kevin Warsh’s nomination.

Summary

US Blocks Iran

The United States began blocking Iranian vessels from exiting the Strait of Hormuz after Iran responded by stopping other ships, heightening the standoff that started on February 28.
Bond markets now price the Federal Reserve (Fed) policy rate as unchanged through at least mid-2027, showing rate-cut expectations have faded.
St. Louis Fed President Alberto Musalem warned that prolonged high oil prices could raise core inflation and threaten medium- to long-term inflation expectations.

Summary

Powell Stays

Supreme Court has not ruled on President Donald Trump’s effort to oust Fed governor Lisa Cook.
Fed Chair Jerome Powell said he will stay on the Federal Reserve board despite investigation.
BNP Paribas economists expect unchanged rates through 2027, warning the Fed may hike in June if Strait of Hormuz stays closed and labour data strong.
They note Kevin Warsh could signal independence by raising rates in June, contrary to expectations.

Summary

Warsh Calls Reform

Warsh said at his April 21 hearing the Federal Reserve needs new tools, an inflation framework, and less forward guidance.
David Royal, Thrivent CFO warned confirming Warsh could raise questions, intensify independence concerns, and increase volatility.
Austan Goolsbee, Chicago Fed President cautioned high oil prices and new tariffs could trigger recession eroding confidence.
William Stern, Cardiff CEO urged small-business owners not to rely on the Fed but to fight permanent inflation.

History

Historical Context

The 1973 OAPEC oil embargo forced U.S. gasoline prices up 43% by June 1974, prompting Nixon to keep domestic oil price controls and create the Federal Energy Office under William E. Simon. After U.S. production peaked in 1970, imports surged, and Carter began deregulating oil prices in April 1979. Those shocks still shape today’s Fed policy debates.

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Fed Holds Rates

The Federal Reserve (Fed) will keep its benchmark rate unchanged at the March 2026 meeting, maintaining the 3.5%-to-3.75% range.
Inflation stays above the 2% target, Fed Governor Christopher Waller warned high energy prices could embed higher inflation and slow activity.
Fed Chair Jerome Powell’s term ends on May 15 2026 after Justice Department dropped its criminal investigation, with Senator Thom Tillis saying he will no longer block Kevin Warsh’s nomination.

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