In Fed Chair's Final Meeting, Rates Remain Unchanged

As expected, the Federal Reserve is leaving interest rates unchanged at 3.50% - 3.75%. It's the third time in a row the Fed has kept rates steady.  

In what was likely Jerome Powell's last meeting as Fed chair, 4 Fed members dissented on the Fed's interest rate pause for the first time since 1992. Plus, 3 Fed members did not support the inclusion of an "easing bias" in the statement.

Powell, who's term ends in May said, Middle East developments are contributing to a "high level of uncertainty", and there is concern over increase in energy prices.

The Fed also appears to be bracing for more inflation, replacing "somewhat elevated" with "is elevated" in reference to inflation.

But some experts say that's not the real problem.

"You can't justify cutting interest rates right now when the Fed has so many trillions of dollars of financial assets on it's balance sheet" said EJ Antoni, economist with the Heritage Foundation, "They need to start decreasing that, to put downward pressure on inflation and to give them room."

Governor Stephen Miran dissented in favor of a quarter percentage point cut.

Earlier today, the Senate Banking Committee advanced President Trump’s nomination of Kevin Warsh, to replace Powell as the next Fed chair.

"Unfortunately, he really has botched the job" Antoni told KTRH, "He overtightened in 2019, he gave us 40-year high inflation and the fastest rise in interest rates in 40 years. I mean, we can go on and on here."

The full Senate is widely expected to approve Warsh as well, setting up the Fed’s first leadership change since Powell took over in 2018. But Powell announced that he plans to stay on as a 'governor' with the Fed, until after the DOJ wraps up it's investigation.