Jerome Powell's term as central bank chair ends in May. Sophie Park/Getty Images 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 came 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. Despite the coming end of Powell's time as chair, he said he'd stay on the FOMC as a governor until he's convinced the DOJ investigation is "well and truly over." Here are all the highlights from Powell's final Fed meeting and press conference. Our 3 main takeaways The Fed is still split on what comes next: With four dissents, Kevin Warsh would step into an especially divided central bank, which could prove a challenge for future policy moves. Powell, however, said this difference in opinion is "natural." Powell will remain as a governor, amid Fed independence concerns. The exiting chair will remain on the FOMC until he is sure the DOJ investigation is "well and truly over" and he feels it's "appropriate" for him to step away. He expects more attacks from the Trump administration, which he said are "battering the institution." The Iran war makes the Fed's future plans less certain. As inflation remains stubbornly above the committee's 2% goal, Powell said four major supply shocks have rocked the US economy during his tenure: the pandemic, Russia's invasion of Ukraine, Trump's tariffs, and the Iran war. Continued closure of the Strait of Hormuz makes if harder to keep prices down, he said. Read full story Stocks are down after the Fed decision Stocks were mostly lower after the decision, with the market struggling to gain all day in the face of rising oil prices. Both the Dow Jones and S&P 500 remained in the red, while the tech-heavy Nasdaq was slightly higher as investors geared up for a big round of mega-cap tech earnings due after the bell. Commentators said after the rate announcement that the uncertainty about the change in leadership at the central bank is a concern for markets. "Adding to the uncertainty is the prospect of the leadership transition," said Seema Shah, chief global strategist at Principal Asset Management. "With Kevin Warsh poised to take the helm, markets are weighing the possibility of a regime shift," she said, flagging changes in how the Fed may communicate about things like inflation and productivity in the economy. "Together, these forces make the policy outlook especially hard to decipher." Powell's time as chair has seen the world become 'much more challenging' Reflecting on his legacy, Powell said he and his colleagues have done their best to handle the supply shocks of the early 2020s. "This is a very different world, and a much more challenging one," than when he began his role in as a governor in 2012 and chair in 2018, Powell said. He said he is proud of the work the FOMC has done in difficult circumstances. The reporters in the room gave Powell a round of applause as he left the podium. "I won't see you next time," he said. It's a difficult moment for balancing inflation and the job market Powell said the FOMC is committed to bringing inflation back down to the 2% goal sustainably. He said trying to get to that benchmark quickly could be "costly" in terms of job loss, so the committee must be careful. He feels that growth is solid across the economy and there is "instatiable demand" for data centers and AI-driven gains. "That's a positive thing," Powell said. The main challenge continues to be supply shocks like the Iran war and tariffs that are driving costs up. Powell remains committed to the Fed's political independence Central bank independence "to a significant extent" comes from the law, Powell said, and the Fed has successfully gone to court to defend it. He said that there is "a set of customs and a boundary line" between the Fed, the Treasury Department, and the White House. Those "need to be respected," he said. Fed independence continues to be "at risk," he added, and "that's not over." He argued that independence is key to the central bank's ability to manage the economy. "It's not about the Fed or the institutions, it's about the benefits of a central bank that makes decisions based on analysis and our best thinking rather than trying to help or hurt politicians," he said. There are "widespread concerns" on the committee about future attacks on the Fed from the executive branch, Powell said. "That would be a problem." Powell argued that the dissents are a sign of healthy debate The chair assured reporters that today's Fed dissents isn't a problem. "It's only natural that you would have a range of views on the committee," Powell said. "If everyone agreed, that would be surprising." It's a "function of the extraordinatly challenging set of supply shocks" that the economy has been dealing with for five or six years, Powell said, and all FOMC members have different risk tolerances. As far as political pressure, he said he will take Warsh "at his word," and expects him to stand up for Fed independence. We're 'pretty close' to the neutral rate after years of supply shocks The current interest rate is at the "higher-end" of neutral, Powell said. He believes that the current policy — rates between 3% and 4% — can be seen as "moderately restrictive," without having a major drag on economic growth. The pandemic, the invasion of Ukraine, tariffs, and the Iran war have driven years of supply shocks, he said. "These are tough, difficult judgements." The closure of the Strait of Hormuz continues to drive inflation Holding rates allows the Fed to "wait and let things develop" in the Iran war, Powell said. He feels there is no way to know for sure when the Strait of Hormuz will be reopened, meaning that Americans can continue to expect inflation from high oil prices. Maintaining interest rates allows the central bank to monitor the global economic situation most effectively before their next decision, he said. "We think our policy rate is in a good place to move in either direction," he added. "It's going to depend how things evolve." Powell reiterated that the Fed will push for a consensus in its decision-making "People are not saying we need a hike now," Powell said, but there is general consensus on the committee that the Fed needs to remain neutral. "A group of people, including me, felt like we didn't need to be in a hurry." Powell added that monetary policy is will continue being made by 19 people, even as he cycles off the board. He's not concerned about the integrity of the Fed's team-oriented decision-making process. "I think Kevin Warsh has the capability and skills to be very good at that," he said, adding that he won't be "a shadow chair" when he returns to the governor role. Powell reflected on the economic challenges of the last few years Powell said the US experienced low levels of unemployment in the 2010s, with limited reaction from inflation. During this time, Powell said that Americans at the lower end of the income-spectrum faced higher rates of wage growth. The pandemic shock changed this trend, Powell said, and contributed to inflation jumps. "It's always a balance," to make policy that meets both sides of the mandate, he added. How Powell's successor will communicate the Fed's thinking Powell commented on Warsh's statement that he may change the way the FOMC delivers rate projections and economic forecasts. He supports this reevaluation, he said. "Every incoming chair takes a look at communications and its a very healthy thing." Warsh has not elaborated in detail about his new plan for Fed forecasts. Powell addressed the debate over changing language around future rate cuts In staying in the FOMC, Powell said he would "not interfere" and try to support the new chair when he can. He said it can be a challenge to get all "strong-minded" committee members to agree on policy moves. Still, inflation remains the biggest headline for most Fed members — and is something they had "vigorous discussion" about prior to Wednesday's decision. He discussed the three dissenting members who flagged "easing bias" and language around future rate cuts, in part due to inflationary pressures. Powell elaborated on his concerns about Fed independence Powell said he is concerned about the "series of legal attacks" on the Fed. He clarified that he has no problem with verbal criticism from elected officials, but worries about recent legal challenges "battering the institution." He said the American people and the nation's economic health depend on an independent central bank free of poltical intervention. He said he will leave "when I think it is appropriate to do so." Powell will stay on as a governor after his term as chair ends The Fed chair noted that the DOJ probe has been dropped, which he "welcomes," while acknowledging that the US Attorney General said she would "not hesitate" to restart the investigation. He said he will remain on the FOMC until he is sure the investigation is "transparent" and "well and truly over." He plans to keep "a low profile" a governor, he said, and emphasized that Warsh would make his own mark on the Fed. Powell congratulated his likely successor and reflected on his time running the Fed Acknowledging his last press conference as chair, Powell congratulated Kevin Warsh on his pending confirmation after the Senate Banking committee advanced his nomination this morning. "I wish him well as that process continues," he said. He said every Fed decision is made in service of a financial system the "American people can depend on." He said the institution is resilient and has an "extraordinary" staff. The committee's economic outlook Powell stepped up to the podium with an outline of the committee's economic view. He said the Fed's dual mandate goals are top priorities, especially as inflation stubbornly remains above the 2% goal — which he attributed to tariffs and soaring oil prices. The economy has been "expanding at a solid place," with strong consumer spending. Unemployment is "little changed" since the last meeting, but labor market participation and job growth are weak. Most dissents since the 1990s The decision is the most divided vote since 1992, signaling significant difference in priorties among central bank members and significant economic uncertainty around inflation and the job market. The FOMC said that developments in the Middle East, high global energy prices, and a sluggish hiring environment contributed to their call. A divided vote There were four dissents on Wednesday's vote. The FOMC has disagreed on interest rates at every meeting since September, though four is a larger number than usual. Stephen Miran preferred a quarter-point cut, and members Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, "supported maintaining the target range for the federal funds rate but did not support inclusion of an easing bias in the statement at this time." 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 Bloomberg/Getty Images 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. "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. 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. Read full story 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." 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. Read full story 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. 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. 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." 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 S&P 500 was down 0.2% shortly after the open, and the Dow was down nearly 300 points. A highly anticipated succession Andrew Harnik/Getty Images 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. "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." window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); 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. "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." window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); Powell's record Fed Chair Jerome Powell Kevin Dietsch/Getty Images 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. Read full story 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. 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. Read the original article on Business Insider