Federal Reserve Chair Jerome Powell is delivering what is expected to be his final press conference as the central bank's leader, after the Federal Open Market Committee voted to hold interest rates at their current range of 3.5 to 3.75 percent. The decision comes amid mounting uncertainty over the ongoing conflict with Iran and stubbornly high inflation that continues to pressure American households.
The rate hold was widely anticipated by markets, but the political backdrop has shifted dramatically in recent days. The Senate Banking Committee voted earlier Wednesday to advance Kevin Warsh, President Trump's nominee to succeed Powell, to a full floor vote. That move was cleared after the Justice Department dropped its criminal investigation into Powell, removing a key obstacle to a smooth leadership transition.
Powell's remarks, scheduled for 2:30 p.m. EDT, are being closely watched for any signals about the Fed's trajectory under a new chair and how the central bank plans to navigate the twin challenges of war-driven supply shocks and persistent price pressures. The FOMC statement accompanying the rate decision emphasized that the committee remains data-dependent and prepared to adjust policy as needed.
The decision to hold rates steady reflects a cautious approach, with policymakers wary of tightening too aggressively amid geopolitical turmoil while also needing to keep inflation expectations anchored. The Iran conflict has injected significant uncertainty into energy markets, with oil prices fluctuating wildly in recent weeks.
Warsh's nomination now heads to the full Senate, where Republicans hold a slim majority. The former Fed governor and Trump administration official has signaled a more hawkish stance on inflation, which could herald a shift in monetary policy if confirmed. The Senate panel's vote came just hours after the DOJ closed its probe, a move that cleared the path for a swift confirmation process.
Powell, who was renominated by President Biden but saw his term cut short by Trump's return to office, is expected to leave the Fed entirely after his chair term ends. Some Republican senators have urged him to depart sooner, with Sen. Kevin Cramer suggesting Powell should 'cash in' on his private sector ties rather than remain on the board.
The press conference is being livestreamed above, and Powell is likely to face questions about the timing of his departure, the independence of the Fed under a new chair, and the central bank's outlook for rate cuts later this year. Markets are pricing in a potential cut in the second half of 2025, but that depends heavily on how the Iran situation evolves and whether inflation shows sustained signs of easing.
For now, the Fed is holding its fire, waiting for more clarity before making its next move. Powell's final public appearance as chair may set the tone for the transition ahead.
