The Federal Reserve has opted to keep interest rates steady at 3.5% to 3.75%, signaling a cautious approach as the nation grapples with the economic fallout of the conflict with Iran. This decision comes as energy costs remain volatile and inflation hit 3.3% in March, the highest level since May 2024.
While the Fed hinted at potential future cuts, experts warn that the U.S. blockade of Iranian ports could keep oil prices elevated, potentially delaying any relief until 2026. As Jerome Powell concludes his tenure as chair, his successor, Kevin Warsh, moves closer to confirmation after receiving backing from the Senate Banking Committee.
Powell, whose term as a governor runs through 2028, stated he will remain on the board until ongoing investigations are fully resolved, though he pledged to maintain a low profile and avoid interfering with the new leadership.
Meanwhile, Powell expressed concern over the Trump administration’s legal scrutiny of the institution, claiming such actions threaten the Fed's ability to operate without political influence.
With Republicans in control of the Senate, Warsh’s confirmation is now viewed as a formality, marking a significant transition for the central bank as it navigates a challenging economic landscape.
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