Full Breakdown
Fed Holds Rates Steady as Powell’s Likely Final Meeting Amid Iran-War
4/28/2026, 10:54:38 PM
Core Event: Powell’s Likely Final Fed Meeting Holds Rates Steady
The Federal Open Market Committee will meet on April 27-28 to keep the overnight rate at 3.50 %–3.75 %, unchanged since December. The vote is viewed as Chairman Jerome Powell’s last before his term ends on May 15, after Justice Department dropped the criminal probe into his office-renovation project, clearing a path for Trump-nominated successor Kevin Warsh.
Background & Context: Iran-War Oil Shock and Inflation
The war that began on Feb. 28 between the United States, Israel and Iran has stalled but left the Strait of Hormuz blocked. Brent crude has risen about 50 % since the conflict, pushing gasoline and energy costs higher and lifting March consumer-price inflation to 3.3 % YoY, above the Fed’s 2 % target.
Official Statements & Responses
The Justice Department said the criminal probe into Powell’s renovation project was dropped, satisfying a Senate demand. Powell said he will decide whether to stay on Board after his chairmanship ends. Governor Waller warned that high oil prices could slow employment. Musalem cautioned that de-anchoring inflation expectations would merit a rate increase. Vanden Houte noted two cuts this year may be pushed back as hostilities ease.
Criticism & Opposition
President Trump has repeatedly called Powell “too late” for not delivering larger rate cuts. Senator Thom Tillis blocked Warsh’s confirmation until the DOJ probe ended, a stance that shifted after the investigation was dropped. Warsh prefers lower rates, arguing AI-driven productivity could sustain growth without raising inflation.
Verbatim Quotes
- “make that decision based on what I think is best for the institution and for the people we serve,” — Jerome Powell, Fed Chair
- “The longer energy prices remain elevated and the strait is constrained, the greater the chances that higher inflation gets embedded across a wide variety of goods and services, various supply chain effects start to emerge, and real activity and employment start to slow,” — Christopher Waller, Fed Governor
- “at that point, the risk of de-anchoring inflation expectations would become relevant. Right now, inflation expectations medium to long term are very anchored, but they would become relevant, and at that point it might be appropriate to raise rates.” — Alberto Musalem, President, St. Louis Fed
- “Our view is that the lessening of hostilities has reduced the risks of a worst-case scenario, which we think could have prompted more aggressive rate cuts to support the economy. Our baseline still assumes the Fed cuts rates twice this year, but it’s becoming more likely those cuts are shifted into the future,” — Nancy Vanden Houte, Lead U.S. Economist, Oxford Economics
What’s Next
The Fed will release its policy statement at 2 p.m. EDT, followed by Powell’s press conference. The Senate is expected to vote on Warsh’s confirmation in the coming weeks, and the June FOMC meeting will reveal whether the baseline for two rate cuts this year is maintained.
