Fed Keeps Rates Steady In Possibly Powell’s Last Rate Decision; All Eyes Now On Warsh

The Federal Reserve on Wednesday held its benchmark interest rates steady in its first policy meeting of 2026, on the back of encouraging labor market data, with the focus on Kevin Warsh, who is set to take the reins over from Jerome Powell. 

The Fed announced that it will hold key interest rates at 3.50% - 3.75%, in line with market expectations. Markets are now pricing in an 85% chance the central bank doesn't move rates at all for the rest of 2026, per the CME FedWatch Tool. 

Earlier this morning, the Senate Banking Committee voted to advance Kevin Warsh’s nomination as Fed chair to a full Senate floor vote, bringing him one step closer to becoming the 17th chair of the central bank. 

Powell's tenure as Fed chief ends on May 15, but his separate term as a member of the central bank's Washington-based Board of Governors extends to January 2028. 

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.32%, while the Invesco QQQ Trust (QQQ) gained 0.14%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory. 

The iShares 7-10 Year Treasury Bond ETF (IEF) was down 0.4% at the time of writing.

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