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Fed holds rates at 3.50%–3.75%; Chair Powell says he will remain on the Board until investigation concludes
Summary
The Federal Open Market Committee left the federal funds target range at 3.50%–3.75%. Chair Jerome Powell, who said this was his last press conference as chair, told reporters he will remain on the Board of Governors until a related investigation is resolved with "transparency and finality."
The Federal Open Market Committee on Friday kept its target range for the federal funds rate at 3.50% to 3.75%, and Chair Jerome Powell said he will step down as chair on May 15 but remain on the Board of Governors until a criminal investigation and related legal steps are fully resolved.
"At today's meeting, the committee decided to maintain the target range for the federal funds rate at 3 and a half to 3 and 3 quarters percent," Powell said, adding that the committee views the current stance of monetary policy as appropriate to promote progress toward maximum employment and 2% inflation. He noted that inflation measures remain above the 2% goal, citing staff estimates that total PCE prices rose 3.5% over the 12 months ending in March and core PCE rose 3.2%.
Powell said the global rise in energy prices stemming from the conflict in the Middle East and earlier tariff effects had raised near‑term uncertainty.
When asked why he will remain on the Board after his term as chair ends, Powell said he was staying "because of the actions that have been taken" against the institution and to see the process through. He said the U.S. attorney for the District of Columbia had closed a criminal investigation but that the Department of Justice told the Fed it would not reopen the matter unless the Fed’s inspector general made a criminal referral. "I will not leave the board until this investigation is well and truly over with transparency and finality," Powell said.
Powell characterized recent legal actions and court cases as "unprecedented" in the Fed’s history and warned they threatened the Fed’s ability to make monetary policy without political considerations. He emphasized that Fed decisions are the product of deliberation by the Board and the FOMC and that the Fed’s independence rests on law and long‑standing customs as well as on successful defenses in court.
On the committee’s internal debate, Powell said a group of members favored changing the post‑meeting language that previously signaled an "easing bias," but the majority did not think changing to a neutral stance was necessary at this meeting. He noted there were dissents related to guidance language but that the rate decision itself had broad support.
Powell also signaled the Fed would continue to monitor incoming data closely. "Monetary policy is not on a preset course, and we will make our decisions on a meeting‑by‑meeting basis," he said.
Powell’s term as chair ends on May 15; he said he planned to serve as a governor for a period after that date and to keep a lower public profile while remaining a constructive participant in Board deliberations. When Kevin Warsh is confirmed and sworn in, Powell said, Warsh would become the board chair and would be elected by colleagues to chair the FOMC.
The Fed’s next policy meeting will be closely watched for whether committee members move further toward a neutral or more hawkish guidance as data on inflation and energy prices evolve.
