Federal Reserve officials are expected to leave the central bank's key interest rate unchanged at what is likely Fed Chair Jerome Powell's last meeting.

What To Expect From The Federal Reserve's Meeting Wednesday

Diccon Hyatt

Full Bio Diccon Hyatt is an experienced financial and economics reporter. He's written hundreds of articles breaking down complex financial topics in plain language, emphasizing the impact that economic currents would have on individuals' finances and the market. He has a Bachelor's degree in English from the University of Delaware.

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Published April 24, 2026

05:10 PM EDT

Federal Reserve Chair Jerome Powell departs after speaking during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on March 18, 2026 in Washington, DC.

The April meeting is likely to be Fed Chair Jerome Powell's last. Anna Moneymaker / Getty Images

Key Takeaways

The Federal Reserve is widely expected to keep its key interest rate steady at its meeting next week as it awaits the economic fallout from the Iran war.
The meeting could be the last presided over by Fed Chair Jerome Powell, whose term ends in May.
Powell could clarify whether he will remain on the Fed's board of governors—he had earlier said he would stay on the board until a Justice Department investigation of him ended, and it was dropped Friday morning.

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The Federal Reserve is in for a regime change next month, but Chair Jerome Powell's probable final meeting is expected to be all about stability.

Financial markets are pricing in near certainty that the central bank's policy committee will keep its key interest rate flat in a range of 3.50% to 3.75% when its two-day meeting concludes Wednesday, according to the CME Group's Fed Watch tool, which forecasts rate movements based on fed funds futures trading data.1 Fed officials have taken a "wait-and-see" posture, watching how the Iran war is affecting the economy before moving the federal funds rate in either direction.

The war poses risks to both sides of the Fed's dual mandate to keep inflation low and employment high. The conflict has pushed up gasoline prices, stoking inflation. It has also created uncertainty among business leaders, which could lead to a hiring slowdown.

The threats are pulling the Fed's monetary policy in opposite directions. Keeping the fed funds rate higher for longer, or raising it, could counteract high inflation, while lower rates could encourage spending and fortify the job market if a downturn gathers momentum. Powell will likely address the Iran war and the dilemma it creates in his post-meeting press conference.

What This Means For The Economy

The departure of Powell would set the stage for incoming Fed Chair Kevin Warsh, who has promised a different approach to monetary policy. Warsh has criticized some of the Fed's practices, including holding trillions in treasuries and mortgage-backed securities to stabilize financial markets.

"We expect Powell’s overall tone will be consistent with a Fed that expects to be on hold for some time," economists at Deutsche Bank led by Chief Economist Matthew Luzzetti wrote in a commentary.

The meeting may also resolve the uncertainty surrounding the Fed's leadership.

Powell's term ends in May, before the Federal Open Market Committee's next scheduled meeting in June. However, his tenure on the Fed's board of governors lasts until 2028. Normally, Fed chairs in this position leave the board of governors when their leadership term ends. Following the traditional process, Powell would step aside for Kevin Warsh, the successor that Trump has nominated, who is currently in the midst of the Senate's confirmation process.

But the final few months of Powell's tenure have been anything but normal, largely due to a Justice Department criminal investigation of the current chair that was dropped on Friday morning.

Related Education

[Federal Open Market Committee (FOMC): What It Is and Does

Federal Open Market Committee (FOMC): The branch of the Federal Reserve System that determines the direction of monetary policy. ](https://www.investopedia.com/terms/f/fomc.asp) [Inflation: What It Is and How to Control Inflation Rates

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The probe of cost overruns at the Fed's ongoing headquarters renovation had thrown the process into chaos. Powell had denounced the investigation as a pretense by the Trump administration designed to pressure the Fed into sharply lowering interest rates. Powell said he would not leave his seat on the board of governors until the investigation was "well and truly over, with transparency and finality."2 Not only that, but a key senator, Thom Tillis of North Carolina, said he would block Warsh's confirmation until the investigation was scrapped.

On Friday, U.S. Attorney for DC Jeanine Pirro said she was handing the investigation over to the Fed's internal watchdog, but warned she could reopen it if needed. Wednesday's press conference could be a forum for Powell to clarify whether he considers that "well and truly over."

If Pirro scrapping the investigation satisfies Tillis, the decks would be cleared for Warsh to take over by the next meeting in June. Warsh, a former Fed governor, promised "regime change" at the Fed in his confirmation hearing last week, saying he wanted to make sweeping changes to the way the central bank operates. Those include reducing the amount of financial securities the Fed owns, reducing the amount of "forward guidance" its leaders give about their interest rate plans, and changing its approach to inflation statistics.

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