Federal Reserve Chair Jerome Powell presided over his final FOMC press conference on July 30, Beijing time. The committee voted to keep the federal funds rate unchanged at 3.50% – 3.75% for the third straight meeting, but internal divisions surfaced with four dissenting votes. Powell also dropped a bombshell: after his chair term ends on May 15, he will stay on as a governor, vowing to defend the Fed's independence against political attacks.
Four Dissents: One Wants a Cut, Three Oppose Easing Bias
In his opening remarks, Powell reiterated the dual mandate of maximum employment and price stability. The economy is expanding at a solid pace, with unemployment steady at 4.3% and inflation sticky—headline PCE at 3.5% and core PCE at 3.2%. Powell acknowledged that Middle East conflicts are pushing up oil prices, creating high uncertainty. Monetary policy has no preset path; decisions will be made meeting by meeting.
The vote split was unusual: one member called for an immediate 25-basis-point cut, while three others supported holding rates but strongly objected to retaining the "easing bias" language in the statement. Powell clarified in Q&A that no one is currently advocating for a rate hike; the disagreement centers on the pace of future easing.
Stepping Down as Chair, Staying as Governor: Guarding Fed Independence
Incoming Chair Kevin Warsh has cleared the Senate Banking Committee and is set to take over on May 15. Powell gave an emotional farewell but declared he will continue as a Fed governor for an undetermined period. He said his decision is driven by a need to defend the Fed's independence amid unprecedented legal and political assaults. He will remain inside the institution to fight political interference through the court system, insisting these investigations must be concluded "well and truly over with finality and transparency" before he leaves.
Powell's move to stay on as a governor caught many off guard, but it aligns with his long-standing commitment to institutional guardrails. As Warsh prepares to take the helm, the Fed's internal divisions and external political pressures will remain a focal point for markets.