Fed Holds Rates 11-1 In Powell'S Likely-Final Decision, Four Dissents Reveal Deep Committee Split

The Federal Reserve (@federalreserve) held its benchmark federal funds rate steady at 3.5% to 3.75% on Wednesday, April 29, in what is widely expected to be Jerome Powell's final meeting as Chair before his term expires on May 15.

The headline decision was largely a foregone conclusion — markets had priced in a 100% probability of no change — but the vote count told a different story. The FOMC split 11-1 on the rate itself, with Fed Governor Stephen Miran dissenting in favor of a 25-basis-point cut. Three additional members — Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan — dissented on the statement language, opposing the inclusion of wording that signaled a bias toward future easing. That produced an effective 8-4 split when accounting for all dissents, the most divided FOMC vote since October 1992.

A Policy Hold Shaped by War, Inflation, and a Stable Labour Market

Wednesday's hold marks the third consecutive pause in 2026, following rate holds in January and March. It comes after three successive 25-basis-point cuts in September, October, and December 2025. The committee cited elevated energy prices stemming from the conflict in the Middle East, sticky inflation running well above the Fed's 2% target, and a labour market that remains stable if unspectacular as reasons to stay put. The FOMC's statement pointed to "a high level of uncertainty about the economic outlook" linked to Middle East developments, with the central bank flagging that "elevated" inflation is tied to the "recent increase in global energy prices." Economists at Moody's noted the hold met expectations, with rising inflation risks from the conflict outweighing contained near-term growth risks. Market pricing now puts the chance of any rate cuts in 2026 at below 25%.

Powell's Exit and the Warsh Succession

Powell's 2:30 PM ET press conference following the decision is expected to be his last as Fed Chair. A key question hanging over it is whether Powell will remain on the Fed's Board of Governors through January 2028 — his governor term's expiry — rather than depart on May 15 alongside his chairmanship. Staying would be historically unusual and would deny the Trump administration an additional board seat to fill. Prediction market platform Kalshi puts a 30% chance on Powell stepping down as a governor by June, though bettors assign 81% odds he departs by year-end.

Hours before the rate decision, the Senate Banking Committee advanced Kevin Warsh's nomination to lead the Fed in a 13-11 party-line vote — the first fully partisan committee vote on a Fed chair nominee in the panel's history, according to Senator Elizabeth Warren. Warsh, a former Fed Governor and Ben Bernanke's liaison to Wall Street during the 2008 financial crisis, is now on track for a full Senate confirmation vote the week of May 11, ahead of Powell's May 15 term end. Just 50% of respondents in the latest CNBC Fed Survey believe Warsh will conduct monetary policy mostly or very independently, reflecting persistent market uncertainty over the central bank's direction under new leadership.

Sources:
CNBC — Fed holds rates steady amid dissent, April 2026
CNBC — Kevin Warsh clears Senate Banking Committee, April 2026
CBS News — Federal Reserve holds rates for third straight meeting, April 2026