The Federal Reserve kept interest rates steady Wednesday as President Trump’s new pick to lead the bank inched closer to confirmation.
By a vote of 8-4, the Federal Open Market Committee (FOMC) decided to maintain its baseline interest rate range between 3.5 percent and 3.75 percent at the end of what will likely be Jerome Powell’s final meeting as Fed chair.
Hours earlier, a Senate panel approved along party lines the nomination of Kevin Warsh to succeed him.
With the criminal probe into the Fed and Powell on ice for now, Warsh is on track to be confirmed by the full Senate before the end of his predecessor’s term as Fed chair in May and the next FOMC meeting in June.
“This accelerates the timeline for a Kevin Warsh confirmation and increases the likelihood that the April meeting will be Jerome Powell’s last,” wrote Stephen Kates, financial analyst at Bankrate, in a research note.
Warsh is generally considered more likely to support interest rate cuts than Powell has been, given Trump’s insistence that his next Fed chair support a looser approach to monetary policy.
Even so, Warsh may face challenges making his mark on the Fed as the bank faces a critical economic obstacle with no clear path forward.
Powell also said Wednesday he would stay on the Fed board as a governor after ceding the chair role to Warsh and would remain until he felt the Department of Justice (DOJ) probe was done for good.
The Fed chair vowed to keep a “low profile” as a governor and would seek to avoid overshadowing or undermining Warsh, whom Powell congratulated during his press conference.
“My concern is really about the series of illegal attacks on the Fed which threaten our ability to conduct monetary policy without considering political factors,” Powell said Wednesday.
“I’ve never suggested that such verbal criticism is a problem, and neither has anyone…