Powell’s Last Big Meeting: What Comes After

The Federal Reserve is set to keep interest rates unchanged at a meeting that many think will be the final one chaired by Jerome Powell. Last week, a path opened for President Trump’s pick, Kevin Warsh, to be confirmed after the Justice Department decided to end a criminal probe into Powell and the Fed. The Senate Banking Committee will likely move Warsh’s nomination to a full vote on Wednesday morning. Powell may stay on the Fed board until 2028, even after his chair term ends in May. He has said nothing about whether he will step down or not, so the meeting’s press conference will focus on his future plans. Citigroup’s chief U. S. economist said the meeting would be less market‑impactful because policy rates are expected to stay the same. The U. S. economy faces many challenges right now, including a war in the Middle East and rising oil prices that have jumped nearly 70% this year. Airlines cut flights as jet fuel costs soar, and inflation climbed to over 3% in March. Experts say Powell will highlight uncertainty about how the conflict affects the economy and monetary policy.The labor market is another puzzle. Job gains in January were strong, but February saw a loss of 133, 000 jobs before March added 178, 000. Economists say the mixed signals mean no clear policy moves are obvious. Powell’s decision to stay on the board may hinge on the investigation that began over Fed headquarters renovations. He said he would not leave until the probe was finished with transparency and finality. Lawmakers, led by North Carolina’s Thom Tillis, had blocked Warsh’s nomination until the investigation ended. The Justice Department has closed the criminal case and handed it to the Fed’s inspector general, who found no wrongdoing. However, the Attorney General warned that a new investigation could start if needed. White House officials said the case was not officially dropped, adding to uncertainty. Economists at UBS think Powell might stay on as governor if the probe could restart. That would be the first time a Fed chair remains on the board after their term since 1948.