Fed holds rates steady, but board vote is most divided since 1992

Dissent rises, with officials split and inflation concerns flagged in policy statement

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Reuters April 30, 2026 2 min read

US Federal Reserve Chair Jerome Powell holds a press conference following a two-day meeting of the Federal Open Market Committee (FOMC), at the Federal Reserve in Washington, DC, US, March 18, 2026. Photo: Reuters

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The Federal Reserve held interest rates steady on Wednesday, but, in its most divided decision since 1992, noted rising inflation concerns in a policy statement that drew three dissents from officials who no longer believe the U.S. central bank should communicate a bias toward lowering borrowing costs.

A fourth dissent at the meeting came in favor of a quarter-percentage-point rate cut.

"Inflation is elevated, in part reflecting the recent increase in global energy prices," the Fed said in its policy statement, a shift from previous language saying that inflation was just "somewhat" elevated. "Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook."

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The 8-4 vote was the most divisive since October 6, 1992, and shows the breadth of opinion that incoming Fed Chair Kevin Warsh will face in pursuing rate cuts, which President Donald Trump says he expects from his chosen successor to Jerome Powell, whose term as central bank chief ends on May 15.

Though the latest policy statement retained language about how the Fed would assess the "extent and timing of additional adjustments" to rates, a phrase that pointed to future cuts as the next likely move, three policymakers objected.

Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan, while supportive of holding the policy rate steady in the current 3.50%-3.75% range, "did not support inclusion of an easing bias in the statement at this time" and voted against the new statement.

With global oil prices lodged above $100 a barrel due to the U.S.-backed war against Iran, the Fed has been hard-pressed to determine if the impact is likely to be seen more through depressed growth or higher inflation, keeping the policy rate in the range where it has been since December despite repeated demands by Trump for looser monetary policy.

Alongside elevated inflation, "the unemployment rate has been little changed in recent months," while the economy continues to expand "at a solid pace," the Fed said.

FED leadership transition

The new statement is likely the last to be issued under Powell's leadership.

Earlier on Wednesday, the Republican-controlled Senate Banking Committee voted to advance Warsh's nomination on a party-line 13-11 vote. The Senate is expected to confirm Warren next month.

Powell is scheduled to hold a press conference at 2:30 p.m. EDT (1830 GMT) to elaborate on the results of the meeting and the economic outlook, and may also address whether he plans to remain at the Fed as a governor in a separate term that runs through January of 2028.

The minutes of the Fed's March 17-18 meeting noted a growing number of policymakers were open to the idea that the central bank's next move might be a rate increase, and the number of hawkish dissents may prompt investors to boost bets that borrowing costs will rise this year.

Since the March meeting, inflation has shown signs of rising, with officials concerned that sustained high global oil prices could evolve from a one-time price shock to a jump in underlying pressure on prices.

Fed Governor Stephen Miran, in what may also be his last meeting, again dissented in favor of a quarter-percentage-point rate cut, as he has done at every meeting since moving to the central bank from his prior job as one of Trump's top economic advisers.