The Penultimate Powell
- The FOMC held interest rates unchanged at a range of 3.50-3.75% for the second meeting of 2026
- Only one Fed Governor dissented in favor of rate cuts, despite short-timer Powell holding little sway
- Higher energy prices threaten to push consumer inflation expectations higher and make the Fed’s job harder
- Dot plot rate projections continue to indicate 2x more rate cuts in 2026 and 1x more cut in 2027
If Fed Chair Jay Powell has a tear-off calendar (definitely The Far Side themed) it’s getting awfully thin—just 58 pages left on the wall until May 15. Today, at his penultimate FOMC meeting, Powell led the FOMC to leave overnight interest rates unchanged at a range of 3.50 – 3.75%, where they have been since December’s cut. With such a short time in office, we had anticipated that Powell’s colleagues at the Federal Reserve Board would begin straying from the consensus-driven views of their short-timer boss. Only one Fed Governor, the obstinate Miran, dissented in favor of a cut. Gov. Waller, who had dissented last time and expressed labor market worries, mysteriously advocated to hold rates unchanged.
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