(The Center Square) – The Federal Reserve wrapped up what could be its last meeting under current Chair Jerome Powell on Wednesday with a decision to hold rates steady, in line with market predictions.
This marks the third consecutive meeting where the board has maintained a target interest rate of 3.5%–3.75%.
The central bank often raises interest rates to tame inflation and lowers them if economic growth is too slow. While oil and gas prices have risen dramatically in the past couple months pushing inflation higher above the Fed’s target rate of 2%, other parts of the economy aren’t seeing as much movement.
“The U.S. economy has been expanding at a solid pace. While job gains have remained low, the unemployment rate has been little changed in recent months,” Powell explained Wednesday with the rate announcement. “We see the current stance of monetary policy as appropriate to promote progress toward our maximum employment and 2% inflation goals.”
Ongoing conflict at the Strait of Hormuz makes it difficult to tell when global energy prices will return to levels closer to what they were before Operation Epic Fury.
Wednesday also saw Fed Chair nominee Kevin Warsh clear the last hurdle in his confirmation process before the final Senate vote, with the Senate Banking Committee voting 13-11 to advance his nomination to the full chamber. The final vote is expected to take place within the next few weeks.
Warsh is President Donald Trump’s nominee to replace Powell, whose term ends on May 15. Powell has often been the object of Trump’s wrath, as the Fed’s rate cuts have not been as aggressive or as fast as the president would like.
Trump has long talked about firing Powell before his term expired, despite the independent nature of the central bank, and the Department of Justice launched a criminal investigation into Powell’s oversight of the Federal Reserve headquarters’ renovations, as there were cost overruns between $600 million and $700 million. The department handed its investigation over to the Fed’s inspector general just days ago, after opening it in January.
Warsh previously served on the Federal Reserve board from 2006 to 2011.
