Transition to a New Fed Chair Is Unlikely to Mean Immediate Rate Cuts

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Transition to a New Fed Chair Is Unlikely to Mean Immediate Rate Cuts

The Federal Reserve is expected to hold interest rates steady this week as Jerome H. Powell presides over what is likely to be his last meeting as chair.

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It is unclear whether Jerome H. Powell will leave the Federal Reserve once his successor as chair is confirmed. His term as governor runs until early 2028.

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Todd Heisler/The New York Times

By

Colby Smith

Colby Smith covers the Federal Reserve.

April 28, 2026,

5:04 a.m. ET

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This week’s Federal Reserve meeting is set to be Jerome H. Powell’s last as chair of the central bank. But the “wait and see” policy path that he carefully carved out amid

resurgent inflation risks

is likely to stay intact long after he leaves the top job.

On Wednesday morning, President Trump’s handpicked successor, Kevin M. Warsh, is expected to take a significant step toward becoming the next Fed chair when Republicans on the Senate Banking Committee clear him for a full Senate vote. Hours later, the Fed will announce its latest rate decision, followed by what looks poised to be Mr. Powell’s final news conference as chair.

New leadership at the Fed will not automatically usher in a sea change in the outlook for interest rates, however. Since December, officials have kept them in a range of 3.5 percent to 3.75 percent, much to Mr. Trump’s chagrin. The president wants substantially lower borrowing costs and has made it clear that he expects Mr. Warsh to deliver them.

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Kevin M. Warsh, President Trump’s pick to lead the Fed, is expected to take a big step toward confirmation this week.

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Kenny Holston/The New York Times

But Fed policymakers project no urgency to restart rate cuts, and Mr. Warsh has said he did not promise Mr. Trump to ease policy in order to get the job, even as Senate Democrats have

questioned

whether he would serve as the president’s “sock puppet.” On Wednesday, the Fed is widely expected to hold rates steady again. In fact, traders in financial markets that track the trajectory of rates predict no pivot toward cuts at all this year.

“The path to cutting is one that is much more fraught now than it seemed a few months ago,” said Nathan Sheets, chief economist at Citi and a former official at the Treasury Department.

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