Comments on FOMC Statement and Press Conference – Currency Thoughts

Comments on FOMC Statement and Press Conference

April 29, 2026

The significant change in this FOMC statement from the last one involves the votes. Once again only Governor Miran dissented in favor of a 25-basis point cut of the federal funds target. The eleven other votes favored leaving the target unchanged at 3-1/2 to 3-3/4% where such has been since December. In addition, three of the 11 votes for keeping the rate unchanged “did not support inclusion of an easing bias in the statement at this time.” These came from Cleveland District President Beth Hammack; Dallas Fed District President Lorie Logan; and Minneapolis Fed District President Neel Kashkari. The easing bias is implied in the sentence with the phrase “In considering the extent and timing of additional adjustments to the target range for the federal funds rate,” since the last six changes in the targeted rate have been reductions.

Whether to continue an easing bias surrounding future possible policy changes occupied a fairly large focus of the press conference as well. In explaining the 8-3 majority among those favoring no cut but not yet ready to shift to a neutral bias, Powell conceded that the committee feels policy now is either quite close to neutral or just marginally on the restrictive side of neutral. He conveyed the several additional points:

• The near-term outlook of energy prices remains highly uncertain because it’s unclear how the war evolves from here.
• With only one vote out of twelve to cut interest rates, the consensus is very widespread that the present interest rate level is the most appropriate one.
• With scant sentiment to change the rate now, there’s no meaningful harm waiting a month or two by which time the case for an easing bias may be much more or much less apparent than now.
• Amid the very elevated level of uncertainty on several scores, officials wish to avoid the confusion of making a change in the policy bias that soon might look premature as more information is learned.

The other main focus of the press conference came in reaction to Powell’s revelation of his decision to stay on the committee as a low profile governor until the current legal challenges against the Federal Reserve are settled firmly and transparently. This is needed to protect the FOMC’s ability to conduct monetary policy using analytical tools in a way that addresses only its twin mandates and without any political considerations that would favor one party or the other. He correctly noted that similar arrangements are followed by most other major central bank after a long historical record showing that policy independence leads to lower and more stable inflation than in instances where safeguards have not been in place.

Copyright 2026, Larry Greenberg. All rights reserved.

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