No rate change amid uncertain economy as Powell acknowledges his last meeting as chairman
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Jerome Powell said Wednesday the Federal Reserve board voted to keep interest rates unchanged, citing an unstable job market and rising energy prices.
While Powell is a key voice on monetary policy, the Feds seven-member board collectively decides whether to change rates.
Powell is expected to be replaced as the board's chairman next month, when his term ends, by Kevin Warsh, who is up for Senate confirmation.
He acknowledged on Wednesday that the day's meeting would be his last as chairman of the Federal Reserve.
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Powell has faced pressure from President Donald Trump to lower borrowing costs but has resisted those calls. Last week, the Department of Justice dropped an investigation into Powell over spending tied to the Feds new headquarters.
The Federal Reserve has a dual mandate: maximize employment and keep inflation low. The central bank typically raises rates when inflation is high and lowers them if the job market shows signs of weakening.
Powell is expected to serve as chair until May 2026 and could remain on the Feds board as a governor until 2028.
He said Wednesday he would remain a governor after May 15, for an indeterminate period.
"I plan to keep a low profile as a governor," he said.
Lower interest rates can spur economic growth by making borrowing cheaper, but policymakers warn that keeping rates low for too long can fuel inflation.
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After U.S. inflation topped 9% in 2022, the Fed raised rates to their highest level in decades. The consumer price index jumped in March after several years of holding near 2% to 3% per year.
Higher borrowing costs have made it harder for consumers and businesses to access credit, often slowing job growth. Powell has said the Feds goal is to balance low inflation with continued employment gains.
Warsh's nomination is currently being considered by the Senate. The Senate Banking Committee voted along party lines 13-11 to advance Warsh's nomination to the full Senate earlier Wednesday.
