The Federal Reserve held interest rates steady for the third consecutive policy meeting this year amid a surge in oil prices and increased economic uncertainty from the Iran war.<\/p>\n
The central bank voted in a split decision Wednesday to hold its benchmark interest rate in the range of 3.5% to 3.75%. Fed governor Stephen Miran disagreed, preferring to cut rates by a quarter percentage point. Cleveland Fed president Beth Hammack, Minneapolis Fed president Neel Kashkari, and Dallas Fed president Lorie Logan supported maintaining rates but disagreed with the \u201ceasing bias\u201d implied in the policy statement and thus dissented.<\/p>\n
The last time there were four dissents was Oct. 6, 1992.<\/p>\n
The divisions emerged as Fed Chair Jerome Powell announced on Wednesday that he intends to remain in his seat as a governor, citing \u201cthe series of legal attacks on the Fed which threaten our ability to conduct monetary policy without considering political factors\u201d as his reason for staying.<\/p>\n
\u201cI plan to keep a low profile as a governor. There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair,\u201d Powell said in a press conference.<\/p>\n
Warsh, President Trump\u2019s nominee to succeed Powell, moved a step closer to confirmation on Wednesday when the Senate banking committee voted to confirm him on a party-line vote and send his nomination to the full Senate.<\/p>\n The policy statement that drew the three dissents retained language stating that \u201cin considering the extent and timing of additional adjustments \u2026 the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.\u201d<\/p>\n That language is considered an easing bias \u2014 in other words, a stance on the committee favoring interest rate cuts. Several members of the central bank have favored changing the language to reflect that there\u2019s an equal chance of raising rates as of lowering them.<\/p>\n \u201cI think that the center is moving toward a more neutral place,\u201d Powell said. \u201cAnd that’s sort of what markets are saying too.\u201d<\/p>\n Fed officials noted that inflation is elevated, in part, due to the recent increase in global energy prices. They also said that conflict in the Middle East is contributing to high uncertainty about the economic outlook.<\/p>\n Read more:\u00a0<\/em>How oil price shocks ripple through your wallet, from gas to groceries<\/em><\/p>\n Powell added that Fed officials have long expected isolated price shocks from Trump\u2019s tariffs, but that the price increases would ultimately stop and not push inflation higher.<\/p>\n \u201cIt\u2019s time for that to happen,\u201d he said. \u201cYou know, we really do expect that to be happening in the next two quarters. So we\u2019ll be watching very carefully to see that what we\u2019ve thought all along would happen.\u201d<\/p>\n<\/p><\/div>\n Powell added, \u201cThat\u2019s kind of (the) critical part of the forecast. We need to really see that with energy.\u201d<\/p>\n Still, Powell cautioned that the risk is \u201creal\u201d for headline inflation, which has been driven up by higher gas prices, to bleed through to core inflation, but that, with interest rates mildly restricting the economy, the central bank can wait and see before it acts. He noted that if the Iran war goes on much longer, the higher gas prices that are hurting consumers now will start to be reflected in other prices.<\/p>\n Powell underscored that officials believe rates are in a \u201cgood place.\u201d<\/p>\n He also said that with inflation running above 2% for several years and the Fed already looking through the impact of tariffs, officials will be \u201cvery cautious\u201d about looking through the surge in energy prices.<\/p>\n He said he\u2019d need to see a peak and then a drop in energy prices, as well as progress on tariffs, before the Fed considers cutting rates.<\/p>\n Wednesday\u2019s policy meeting was Powell\u2019s last leading the central bank. His announcement that he will remain on the Board of Governors breaks with recent precedent but nonetheless delivers on his promise to stick around until a Justice Department investigation into him is \u201cwell and truly over, with transparency and finality.\u201d<\/p>\n Last Friday, US Attorney for the District of Columbia Jeanine Pirro announced that her office was closing its investigation and turning the matter over to the Fed\u2019s inspector general.<\/p>\n \u201cI am watching the remaining steps carefully,\u201d Powell said Wednesday.<\/p>\n \u201cI’m going back to being a governor. I respect the role of chair,\u201d he said, promising that he will try to be a \u201cconstructive participant\u201d in upcoming meetings.<\/p>\n Jennifer Schonberger is a veteran financial journalist covering the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X<\/em> @Jenniferisms<\/em> and on<\/em> Instagram<\/em>.<\/em><\/p>\n Click here for the latest economic news and indicators to help inform your investing decisions<\/strong><\/p>\n Read the latest financial and business news from Yahoo Finance<\/strong><\/p>\n<\/p><\/div>\n![\"Federal](\"https:\/\/s.yimg.com\/ny\/api\/res\/1.2\/hplvjxj8JTP13VyKdRHRKg--\/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTYzOQ--\/https:\/\/d29szjachogqwa.cloudfront.net\/images\/2026-04\/cc250714-53e5-430b-a6cd-164f9a9647d3\")
\u2018The center is moving\u2019 <\/h2>\n
Powell as a participant <\/h2>\n