The Federal Reserve held interest rates steady at 3.6% Wednesday.
The rate-setting committee remains split between hawks who oppose further cuts until inflation falls below 2% and doves who prioritize job market support. Most economists forecast two rate cuts this year, likely starting in June.
Powell’s term expires in May after his 2017 Trump appointment. The President hasn’t named a replacement, though officials signal an announcement could come soon.
The Justice Department served the Fed with subpoenas this month, threatening criminal indictment over Powell’s congressional testimony about the central bank’s $2.5 billion headquarters renovation.
Meanwhile, the Supreme Court heard arguments on Trump’s attempt to fire Fed Governor Lisa Cook over mortgage fraud allegations. No president has fired a Fed governor in the institution’s 112-year history.
Lower rates could reduce borrowing costs for mortgages, auto loans, and credit cards. Economists expect larger tax refunds in the coming months to boost consumer spending, potentially spurring hiring in a weak job market.
The Fed meets eight times annually, with remaining 2026 sessions scheduled for March 17-18, April 28-29, June 16-17, July 28-29, September 15-16, October 27-28, and December 8-9.
