Fed holds rates steady at Powell's final meeting; four officials dissent
Dissent count is the highest since 1992; Kevin Warsh cleared Senate Banking Committee vote same day
Briefing
- •The Federal Reserve left its benchmark interest rate unchanged at the April 29 FOMC meeting, the last expected to be chaired by Jerome Powell before his term expires next month.
- •Four officials dissented, the largest number of dissenting votes at a single Fed meeting since 1992, reflecting internal division over policy direction.
- •The Senate Banking Committee approved Kevin Warsh to succeed Powell as Fed chair on the same day as the rate decision, advancing his nomination toward a full Senate vote.
- •The New York Times reported that Warsh's arrival is not expected to trigger immediate rate cuts, suggesting continuity in the near-term policy stance.
- •The Washington Post noted the meeting occurred amid two months of rising energy prices, adding to the complexity of the hold decision.
Analysis
- →Four dissents at a single FOMC meeting, the most since 1992, signals that the committee's internal consensus on holding has fractured before Warsh even takes the chair. Warsh's arrival will not require him to engineer a policy shift; he inherits a committee already divided, which lowers the procedural friction for a rate move once he establishes his framework. Front-end Treasuries priced on Powell-era continuity face a compression of the timeline to the first post-confirmation policy signal.
- →Rising energy prices noted by the Washington Post as a complicating factor in the hold decision are now running at Brent above $115 and WTI near $100 due to the Hormuz standoff. Warsh's documented preference for weighting inflation over labor means this oil shock lands in precisely the framework most likely to treat it as a sustained price-level risk rather than a transitory supply disruption. This reduces the probability that softening labor data alone unlocks a rate cut in H2 2026.
Historical Context
- Feb 2018
Warsh resigned from the Fed board in 2018 after publicly advocating for rate increases faster than the Yellen-Powell consensus. His return as chair reinstalls a known inflation hawk whose prior internal dissent posture is now externalized as the committee's governing framework.
- 1992
The last time four or more FOMC officials dissented at a single meeting was 1992, during a period of contested rate cuts under Greenspan. That level of internal division preceded a sustained shift in policy direction, as the majority and dissenting factions reflected genuinely different assessments of the inflation-growth tradeoff.
Connected Events
Warsh clears Senate Banking Committee, full Senate vote next
Warsh's Senate Banking Committee approval on the same day as the April 29 hold decision accelerates the leadership transition timeline, with a full Senate vote now the only remaining step before Powell's May 15 expiration.
Brent crude tops $115 as Iran nuclear talks stall over Strait of Hormuz
Brent crude above $115 driven by the Hormuz standoff directly compounds the inflation complexity the FOMC cited in its hold decision, and Warsh's inflation-first framework means this supply shock is less likely to be looked through than it would have been under Powell.
