Federal Reserve splits on rate hold at Chair Jerome Powell’s possible last meeting

The Federal Reserve kept its benchmark interest rates unchanged on Wednesday at 3.5% to 3.75%, according to Fox Business. This marks the third straight meeting with no change after cuts last year, CNBC confirmed. The vote exposed deep divides among officials.

The Federal Open Market Committee split 8-4, the most dissent since 1992. According to CNBC, Fed Governor Stephen Miran pushed for a quarter-point cut, as he has since joining in 2025. Three regional presidents—Beth Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lorie Logan of Dallas—backed the hold but rejected easing language in the statement.

Inflation pressures mount

Officials cited elevated inflation, fueled by global energy prices and the Middle East conflict. The committee’s statement noted, "Inflation is elevated, in part reflecting the recent increase in global energy prices," as reported by CNBC. Trump's tariffs add to the strain above the 2% target.

According to CNBC, job growth slowed but stayed solid, with March nonfarm payrolls at 178,000 and unemployment at 4.3%. Chair Jerome Powell highlighted a labor force dip from lower immigration. Markets priced in no cuts through 2027, per CME FedWatch.

Powell, in likely his last meeting as leader, plans to stay on the Board of Governors past his May 15 term end, Fox Business noted. His full term runs to 2028. He voiced concerns over the Trump administration's probes of the Fed.

Read more on Chicago Star

• Chicago's gig economy is reshaping how locals think about income

• Tesla delivers earnings surprise—TSLA stock soars after Q1 2021 earnings beat

• Adalina team's next big move: Luxury eatery ARLA to open in Chicago’s Gold Coast summer 2026

• Coach Billy Donovan quits Chicago Bulls, goes on to list Lincoln Park home for $4.5M

• Brittany Mahomes eyes payday as her Kansas City Current soccer team hits $325M valuation 

"Policymakers are squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the American people," Powell said at his press conference, as reported by Fox Business. He congratulated nominee Kevin Warsh, whose Senate nod advanced Wednesday. The Senate expects to confirm Warren soon.

Hammack, Kashkari, and Logan opposed phrasing like, per CNBC: "In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks." They saw it as too dovish amid inflation risks.

Stocks dipped as oil surged and earnings loomed. The Fed eyes one cut this year, another in 2027, toward a neutral 3.1% rate, CNBC says. Uncertainty from war and policy shifts clouds the path ahead.

This decision reflects a cautious stance in a tense economic climate. Officials balance job market health against price surges. Investors now watch Warsh's impact.