U.S. Federal Reserve Chairman Jerome Powell arrives for a press conference after the conclusion of the Federal Open Market Committee meeting at the Federal Reserve Building in Washington, DC, on March 18, 2026.
Brendan Smialowski AFP | Getty Images
In what could be Jerome Powell’s last meeting as Fed chairman, he is expected to lead other policymakers into another cautious pause, as stubborn inflation and a resilient labor market still leave little room for rate cuts.
Wednesday’s decision will be taken against a backdrop of rising energy prices and a weak but not crisis labor market, while the central bank has exceeded its 2% inflation target for five years. That’s not a recipe for relaxation, at least not yet.
“The dual mandate would say we’re in a pretty much stable labor market,” Roger Ferguson, an economist and former Fed vice chairman, told CNBC. “On the inflation side of the mandate, there’s still a lot of work to do to keep (inflation) at 3%. I hope they say, ‘We’re going to sit back and see how this situation plays out for a while.'”
Similarly, Goldman Sachs economist David Mericle predicted that the post-meeting statement would “recognize positive labor market developments and rising inflation, but current policy guidance is likely to remain unchanged. As in March, with only one dissenting opinion, we expect a strong consensus to be withheld for the time being.”
So with little drama surrounding interest rate decisions and markets pricing in a 100% chance that the FOMC will remain unchanged, all eyes will be squarely on Mr. Powell.
Barring something unforeseen, Kevin Warsh appears on track to take over as chairman when Powell’s term ends in May.
The shift clouds the usual signaling value of Powell’s post-meeting press conference.
inflation is the key
Powell’s post-meeting news conference, usually a closely watched event for markets, could be seen as a governor’s address to a central bank leader who has had one of the most controversial relationships with a president in central bank history, rather than a guide to future policy action.
“If Mr. Powell had stayed, he might be trying to read more between the lines of what he said at the press conference,” said Jerry Tempelman, a former senior analyst at the New York Fed and now vice president of economic and fixed income research at Mutual of America Capital Management. “But given the fact that Kevin Warsh is probably going to be the Fed chairman soon, all the surrounding language probably doesn’t mean much.”
From a communications standpoint, Tempelman expected the Fed to focus on inflation, which has most recently been running at 3% excluding food and energy using the central bank’s preferred metrics.
With oil prices hovering around $100 a barrel, and the average national gasoline price rising again to now around $4.18 a gallon, the Fed’s path becomes even more complicated.
While Fed officials often view these spikes as temporary, they remain wary of the long-term consequences of escalating fighting in the Middle East.
“Inflation continues to be far above anyone’s expectations and far above the Fed’s target,” Tempelman said. “Everyone expects this to be Chairman Jay Powell’s last meeting, and I think there is little uncertainty about what decisions will be made. So there will be no change in monetary policy at this meeting, and the Fed, chaired by Kevin Warsh, will decide from the June meeting onwards.”
What will Mr. Powell do next?
But that doesn’t mean Powell’s future is decided. The current chairman has the option of remaining at the central bank for the final two years of his term as president. So far, he has given no indication of what he will do next.
Indeed, at the March meeting, he said he would not resign until an investigation into renovations at Fed headquarters was completed. Jeanine Pirro, the U.S. attorney for the District of Columbia, turned the investigation over to the Fed’s Office of Inspector General, politically paving the way for Warsh’s confirmation.
But it’s unclear whether that would meet the “substantially above” standard Mr. Powell set for his departure in March.
“I don’t know if moving this investigation away from the Department of Justice will completely resolve this issue,” Ferguson said. “I don’t know if I would have been able to say, let’s confess everything, if I were sitting in his seat or (one of) his advisors.”
