publication
2026-04-29 20:00
update
2026-04-29 20:59
As widely expected by economists and investors, the federal funds rate range has been kept unchanged, the Federal Open Market Committee decided. As many as four votes against the outgoing president were a sensation.
The federal funds rate range remained unchanged 3.50-3.75% – announced the Federal Open Market Committee (FOMC) in a statement. This is the third decision in a row to keep interest rates unchanged after three consecutive cuts (25 basis points each) made in the fall of 2025.
It is worth noting, however, that the FOMC decision this time was not made unanimously and that as many as four decision-makers expressed their opposition. Traditionally, Stephen I. Miran was in favor of lowering interest rates opted for a 25-point reduction in loan costs. But they also voted against the majority Beth M. Hammack, Neel Kashkari and Lorie K. Loga, who objected to the mild tone of the announcement itself. There haven't been so many “dissenters” on the FOMC since 1992.
In September 2025, the FOMC bowed to pressure from the White House and decided to reduce borrowing costs by 25 percentage points after a 9-month break. Also at the October meeting, a decision was made to reduce the FFR by 25 points. And in December to another -25 bp. The FOMC also added the resumption of QE (i.e. quantitative monetary easing) amounting to USD 40 billion per month. But already in January and March, the Committee did not continue to ease monetary policy. After the spring fuel crisis, monetary policy in the US went into a “wait and see” mode.
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Over the 2026 horizon, the futures market is essentially pricing in no change in Federal Reserve interest rates. The chances of even a 25-point cut were estimated at only 13.4% – according to FedWatch Tool calculations. In 2027, the market is pricing in one or two 25-point reductions in the federal funds rate.
– The Committee is strongly committed to supporting the full employment mandate and bringing inflation back to the 2 percent target, the Federal Open Market Committee recalled in an April statement. This is just in case someone remembers that for over 5 years CPI inflation in the United States has consistently exceeded the Fed's 2% target, and the FOMC has significantly reduced interest rates during this time.
– Developments in the Middle East contribute to a higher level of uncertainty regarding economic prospects – we read in the April statement of the Federal Open Market Committee.
– The latest indicators suggest that economic activity has been growing at a solid pace. Employment growth has remained slow on average, but the unemployment rate has remained largely unchanged in recent months. Inflation is elevated, in part reflecting the recent rise in global energy prices, according to the state of the U.S. economy in an April statement from monetary authorities.
Powell: I will remain on the Board of Governors as long as necessary
– We decided to keep interest rates unchanged. We believe the current monetary policy stance is appropriate to promote progress toward full employment and a 2 percent inflation target, FOMC Chairman Jerome Powell said during a news conference.
– Inflation has recently increased and remains elevated relative to our 2 percent long-term target. It was raised by a significant increase in global oil prices resulting from the conflict in the Middle East, Powell added. – In the short term, higher energy prices will raise overall inflation. Beyond this horizon, the prospects for the economy remain unclear, as does the future direction of the conflict itself, admitted the head of the Fed.
– This is my last press conference as chairman and I would like to share a few thoughts. First of all, I congratulate Kevin Warsh on today's vote in the Senate Banking Committee – an unusual part of the April conference of the head of the Federal Reserve. – The Federal Reserve exists for one purpose: to cultivate the economic conditions within which American families and businesses can thrive. They can rely on a strong labor market, stable prices and a stable financial system, said the outgoing head of the US central bank.
Powell also announced that after his mandate as Fed chairman expires on May 15 will remain on the Board of Governors for a period “to be determined”. – I plan to be a quiet member of the board. There can only be one chairman of the Board of Governors, added Jay Powell. He also said that he would resign from this position when he saw fit. His statutory term of office expires on January 31, 2028.
– Monetary policy is made by 19 people. There's a lot of stability there. Every Fed chair faces the same situation: You have 18 colleagues at the FOMC. 11 vote in a given year. Your task is to create consensus. It's talking to them, getting into their way of thinking and being able to forge a compromise and move on. Every Fed chairman must do this – that's how the outgoing Fed chairman described the job of the Federal Reserve chairman.
The next FOMC meeting is scheduled for June 16-17. Jay Powell is to be succeeded by Kevin Warsh.
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