Fed Holds Rates Steady as Four Dissents Mark Most in 34 Years
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- The Federal Reserve left its target interest rate at 3.5%–3.75% for the third straight meeting to start 2026, in what was almost certainly Jerome Powell's final meeting as chair before his term ends May 15.
- Four officials dissented — the most at a Fed meeting since October 1992 — with three reserve bank presidents (Beth Hammack, Neel Kashkari, Lorie Logan) opposing the statement's 'easing bias' language and Governor Stephen Miran dissenting in the opposite direction to favor a rate cut.
- The hawkish dissents targeted language that implied further rate cuts, with those officials arguing that five consecutive years of above-target inflation and solid growth mean the next move could be a hike rather than a cut.
- Kevin Warsh's nomination to succeed Powell advanced through the Senate Banking Committee on Wednesday morning and appears on track for full Senate confirmation well before the next Fed meeting in mid-June.
- Powell cited uncertainty from the Iran war as justification for patience, telling reporters: 'why do we need to do that now ... we have so much to learn,' and noting the picture could change within 30 to 60 days.
- Powell said he will remain on the Board of Governors beyond his May 15 departure as chair for a period to be determined, citing 'legal attacks on the institution,' and revealed he has not seen Warsh since the start of 2026.
Why it matters: Warsh inherits a committee that just recorded its highest dissent count in 34 years on Powell's last day — three regional presidents are actively fighting any signal of future cuts. That structural resistance, layered on five straight years of above-target inflation, means the rate cuts Trump wants will need to be fought for vote by vote from day one of Warsh's tenure.
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