LIVE: Chair Jerome Powell speaks after Fed holds rates steady

Fed holds rates at 3.5-3.75% amid elevated inflation

The FOMC maintained the target range for the federal funds rate, viewing the current stance as appropriate for achieving maximum employment and 2% inflation goals despite recent price pressures.

Inflation metrics exceed target with energy and tariff impacts

Total PCE prices rose 3.5% over the past year while core PCE increased 3.2%, driven by Middle East energy price spikes and tariff effects on goods sector prices.

Committee divided on easing bias language

Three members dissented on maintaining the current policy statement language, reflecting growing concern that an easing bias may no longer be appropriate given inflation trends, though the majority favored waiting for more data.

Powell extends board tenure to defend institutional independence

Powell announced he will remain as a governor for an undetermined period after his chairmanship ends May 15 to counter unprecedented legal attacks by the administration that threaten the Fed's ability to conduct policy free from political influence.

Criminal investigation closure provides partial assurance

Powell noted the U.S. Attorney closed the criminal investigation against him and received DOJ assurances it won't reopen without an inspector general referral, though he awaits finality before considering departure.

Kevin Warsh positioned as next Fed Chair

Powell confirmed Kevin Warsh advanced out of the Senate Banking Committee and expects a normal transition process when Warsh is confirmed and sworn in as the new board chair.

Solid economic expansion despite labor market cooling

The economy continues expanding at a solid pace with resilient consumer spending, though job gains have slowed and unemployment remains at 4.3% reflecting softer labor demand and lower immigration.

Energy shock uncertainty complicates inflation trajectory

Powell indicated the Fed will likely look through the temporary energy price shock as it did with tariffs, but emphasized the need to see the backside of oil price increases before considering rate cuts given already elevated inflation.