Powell to stay on Fed board; Warsh to become chair in June
Jerome Powell will remain a Fed governor after May 15 and Kevin Warsh will become Fed chair in June; four April FOMC members dissented and three regional presidents opposed retaining an easing bias.
The Federal Reserve left its target for the federal funds rate unchanged at the April Federal Open Market Committee meeting. The central bank announced that Jerome Powell will remain on the Board of Governors after his term as chair ends May 15 and that Kevin Warsh is scheduled to assume the chair in June.
The April meeting produced four dissents, the most at an FOMC meeting since 1992. One governor voted for a rate cut at the meeting. Three regional Federal Reserve presidents objected to language in the policy statement that retained an easing bias.
Powell’s decision to remain on the Board after stepping down as chair is the first time in 75 years a departing chair has stayed at the central bank. His governor term runs through January 2028. Warsh’s confirmation as chair will come while Powell is still a governor; Warsh will take a seat on the Board through a different vacancy tied to an expiring governor’s term.
Fed officials and the policy statement emphasized a data-dependent approach. Officials indicated that labor-market and inflation readings will inform future decisions rather than changes in leadership.
The FOMC’s quarterly projection chart, often called the dot plot, has diverged from actual policy in past cycles. Projections from 2019 into 2020 averaged about 140 basis points above the effective federal funds rate, while 2022 projections underestimated tightening by about 180 basis points. Projections since 2024 have tracked outcomes more closely. The March 2026 dot plot still shows one additional rate cut for the year.
Investment strategists responding to the April meeting suggested more defensive positions within fixed-income allocations. Suggestions included floating-rate Treasury securities, laddered Treasury positions and actively managed funds able to adjust duration. Some strategists also advised caution in relying solely on the dot plot and forward guidance.
The FOMC minutes and upcoming employment and inflation reports will provide further detail on committee members’ views. The voting record and the objections to easing language are documented in the meeting statement and minutes.
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