Fed holds rates as Kevin Warsh closes in on confirmation |
Federal Reserve holds rates as Kevin Warsh closes in on confirmation
The Federal Reserve kept interest rates steady Wednesday as President Trump’s new pick to lead the bank inched closer to confirmation.
By a vote of 8 to 4, the Federal Open Market Committee (FOMC) decided to maintain its baseline interest rate range between 3.5 and 3.75 percent at the end of what will likely be Jerome Powell’s final meeting as Fed chair.
Hours earlier, a Senate panel approved the nomination of Kevin Warsh to succeed him along party lines.
With the criminal probe into the Fed and Powell on ice for now, Warsh is on track to be confirmed by the full Senate before the end of his predecessor’s term as Fed chair in May and the next FOMC meeting in June.
“This accelerates the timeline for a Kevin Warsh confirmation and increases the likelihood that the April meeting will be Jerome Powell’s last,” wrote Stephen Kates, financial analyst at Bankrate, in a research note.
Warsh is generally considered more likely to support interest rate cuts than Powell has been, given Trump’s insistence that his next Fed chair support a looser approach to monetary policy.
Even so, Warsh may face challenges making his mark on the Fed as the bank faces a critical economic challenge with no clear path forward.
Powell was joined by FOMC vice chair John Williams, as well as FOMC members Michelle Bowman, Lisa Cook, Philip Jefferson, Anna Paulson and Chris Waller, in voting to hold rates steady.
Three others — Beth Hammack, Neel Kashkari and Lorie Logan — supported the decision to keep rates the same but “did not support inclusion of an easing bias........