Global Market Strategist
At the April FOMC meeting and Jerome Powell’s last meeting as the Chair of the Federal Reserve, the committee voted to maintain the federal funds target rate range at 3.50%-3.75%. The statement acknowledged the Middle East driven oil shock contributing to elevated inflation and broader uncertainty. Elsewhere, the easing bias in describing the policy outlook was maintained, but not without opposition. Four members dissented, with Miran again, electing to reduce rates by 0.25%, while Hammack, Kashkari, and Logan agreed with policy rates on-hold but opposed keeping the easing bias, arguing the inflation backdrop no longer warrants it.
During the press conference, Powell was forthcoming about his future at the FOMC and confirmed he will remain on the Board after his Chair term ends on May 15th for a period “to be determined”. His reasoning is due to the administration’s ongoing legal attacks against the Federal Reserve. He pledges to keep a low profile, states support for incoming Chair Kevin Warsh in maintaining the Fed as an independent institution and commits to avoiding any shadow-Chair dynamic.
Overall, given Powell will remain on the committee as a governor, it’s presumed that Warsh will have limited impact on Fed operations and the ultimate path of monetary policy going forward. While a reasonable assumption, Warsh has signaled sweeping changes to how the Fed operates that would not require congressional approval, which could change how markets price the Fed:
- W - Withdrawal from forward guidance and frequency of communication
- A - Anchoring to trimmed measures of inflation, less on forecasts
- R - Reduction in the size of the balance sheet
- S - Smaller regulatory footprint
- H - Honor Fed independence by prioritizing inflation discipline
For investors, the Fed is likely to stay on hold for the near future despite the incoming Chair given a stable unemployment rate and inflation moving further away from target. However, the type of communication (statement, dot plot, etc.) and frequency may see more immediate changes under Warsh.
Altogether, the 8-4 voting split speaks to a lack of cohesion at the Fed during a time of elevated uncertainty, and this could get worse once Warsh replaces Powell. We still support the Fed’s easing bias as supply shocks tend to be short-lived; however, yields have moved higher, therefore it is important for investors to diversify across high-quality attractive yielding fixed income, stocks with resilient earnings growth, international assets and a broad basket of commodities and real assets.
By Jordan Jackson - April 30, 2026