Powell's final press conference: Declaring "stepping down but not retiring" to defend Fed independence; 4 dissenting votes against easing within the FOMC do not signal a rate hike

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Powell's final dance! Fed Chair Jerome Powell hosted the last FOMC press conference of his term early this morning (Taiwan time on the 30th), announcing that the benchmark interest rate will remain unchanged at 3.50% – 3.75% for the third consecutive time. Faced with soaring energy prices and sticky inflation, the decision-making body saw a rare and intense split with 4 dissenting votes. As he prepares to depart, Powell announced that he will hand over the reins to the new Chair, Kevin Warsh, in May. However, in a shocking move, he declared he would "step down but not leave," remaining on the Board of Governors as a member, vowing to defend the Fed's independence against unprecedented political attacks. (Previous coverage: Powell says goodbye! Hosting his final Fed FOMC meeting tonight; interest rates remain on hold; successor Warsh is a crypto billionaire) (Background: Fed interest rates remain unchanged! FOMC statement cites "soaring energy prices and Middle East crisis"; 4 dissenting votes within the Fed against "easing bias") The global financial market has reached a historic moment. Fed Chair Jerome Powell hosted the final FOMC press conference of his tenure, marking the end of a career as Chair defined by turbulence and challenges. As expected by the market, the Fed decided to keep the federal funds rate target range unchanged at 3.50% – 3.75%, the third consecutive time it has held steady. In his opening statement, Powell reiterated that the decision-making body remains fully committed to its dual mandate of "maximum employment" and "price stability." Oil prices drive inflation, Fed faces rare "4-vote split" Regarding the macroeconomic outlook, Powell characterized the U.S. economy as expanding at a steady pace. While employment growth has been sluggish, the unemployment rate remains stable at 4.3%. The real pain points are inflation and geopolitics. Powell admitted that due to the impact of Middle East conflicts on global oil prices, inflation has recently remained high, with headline PCE inflation at approximately 3.5% and core PCE at approximately 3.2%. He emphasized: "Developments in the Middle East have created a high degree of uncertainty for the economic outlook. Monetary policy does not have a preset path, and we will make decisions meeting by meeting." Even more striking is the serious divergence in policy direction within the Fed. In this vote, there were a rare 4 dissenting votes. One member called for an immediate 25 basis point rate cut, while the other three, despite supporting the rate hold, strongly opposed retaining the "easing bias" language in the statement. In the Q&A, Powell clarified that no one on the decision-making body is currently calling for an immediate rate hike; the disagreement primarily concerns the pricing of the pace of future easing. Bombshell: Stepping down as Chair but remaining a Governor to defend institutional independence At the end of the press conference, Powell delivered an emotional statement regarding his future. His term as Chair will expire on May 15, and he expressed his congratulations and expectations for the incoming Chair, Kevin Warsh (who has been confirmed by the Senate Banking Committee). However, Powell then dropped a bombshell—he will not be leaving the Fed: "After my term as Chair ends on May 15, I will continue to serve as a member of the Board of Governors, with the specific term yet to be determined. I intend to fulfill my duties as a Governor in a low-profile manner. There is only ever one Chair... Once Kevin Warsh is appointed and sworn in, he will be the new Chair." Why did this veteran, who led the global economy through the pandemic's money-printing frenzy and a cycle of aggressive rate hikes, choose to stay on in a downgraded role? Powell provided a firm reason during the meeting: to defend the independence of the Fed. He emphasized that the institution is currently facing unprecedented legal and political attacks. He will remain inside to protect the ability of monetary policy to function without political interference through the court system, stating bluntly that these investigations must be "well and truly over with finality and transparency" before he truly departs.

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