US Federal Reserve Chairman Jerome Powell arrives for a press conference after a meeting of the Federal Open Market Committee at the Federal Reserve Board Building in Washington, DC on March 18, 2026.
Brandon Smialowski | AFP | getty images
This could be Jerome Powell’s final meeting as Federal Reserve chairman, with hopes he will lead his fellow policymakers toward a more cautious pause, as stubborn inflation and a flexible labor market leave little room for interest rate cuts.
Wednesday’s decision will come against a backdrop of high energy prices and a central bank that has been above its 2% inflation target for five years, while the labor market is weak but not in crisis. This is no recipe for ease, at least not yet.
“On the dual mandate, they would say we are in broadly a stable labor market,” economist and former Fed vice chair Roger Ferguson told CNBC. “On the inflation side of the mandate, there is a lot more work to be done with a stable level of 3% (inflation rate), and I hope they will argue, ‘We’ll wait a while to see how it all plays out.'”
Similarly, Goldman Sachs economist David Mericle expects the post-meeting statement to “acknowledge the better labor market news and higher inflation numbers, but leave permanent policy guidance unchanged. We expect that, like in March, a strong consensus will prevail for the time being, with only one dissent.”
So with a little drama on rate decisions – the markets are Pricing in 100% probability With the FOMC on hold – the focus will shift completely to Powell.
Unless something unexpected comes up, the chairman’s designated successor, Kevin Wersh, is on track to take over when Powell’s term ends in May.
This change tarnishes the general symbolic value of Powell’s post-meeting news conference.
inflation key
Powell’s press conference after the meeting, typically a closely watched event for markets, may be seen less as a guide to future policy moves but rather as a farewell ceremony for a central bank leader who has had one of the The most controversial relationship with a president in the history of the institution.
“If Powell were staying, I would be trying to read more into what he says at the press conference,” said Jerry Tempelman, a former senior analyst at the New York Fed and now vice president of economic and fixed income research at Mutual of America Capital Management. “But given the fact that, in all likelihood, Kevin Wersh will soon be Fed chair, all the language around that, etc., probably becomes less relevant.”
From a communications perspective, Tempelman expects the Fed to focus on inflation, which recently stood at 3% on an ex-food and energy basis using the central bank’s preferred gauge.
Crude oil prices are hovering around $100 a barrel and the average price of gasoline is rising again across the country, Now about $4.18 per gallonThe Fed’s path has been made more complicated.
Although Fed officials often view such increases as temporary, they are also cautious about the long-term effects if fighting escalates in the Middle East.
“Inflation remains well above anyone’s expectations and far above the Fed’s target,” Tempelman said. “Everyone expects this to be Jay Powell’s last meeting. I think there’s also very little uncertainty about what the decision will be, that is, there will be no change in monetary policy at this meeting, and from the June meeting, it will be the Fed … with Kevin Warsh as its chairman.”
What does Powell do next?
However, that doesn’t mean Powell’s future is sealed. current chair He has the option to remain in the central bank for the last two years of his tenure as governor. So far he has not given any indication as to what he will do.
At the March meeting, he said he would not leave until the investigation into renovations at the Fed’s headquarters was complete. Jeanine Pirro, the U.S. attorney for the District of Columbia, turned the investigation over to the Fed’s Office of Inspector General, a move that politically cleared the way for Warsh’s confirmation.
However, it is unknown whether this will satisfy the “well and truly” bar that Powell set for his departure in March.
“I’m not sure that moving this investigation from the Justice Department to somewhere else really does a thorough job of putting this behind us,” Ferguson said. “I’m not sure if I were sitting in his seat or (were one of his advisers) I would say, let’s make everything clear.”
