FOMC Meeting: US Fed Expected To Hold Rates Till 2027 Despite Kevin Warsh Taking Charge

The Federal Reserve is likely to hold steady on interest rates at its next Federal Open Market Committee (FOMC) meeting. The hawkish expectations come despite the Trump nominee Kevin Warsh taking over. Markets are pricing in a slow and steady approach from policymakers with no expectations for rate cuts until late 2027.

FOMC Meeting (April 28, 2026): What To Expect?

The CME Group FedWatch data shows a 99% probability for a Fed rate pause at the current range of 3.50%-3.75%. Moreover, the chances for an increase are pegged at just 1%.

The data indicates market participants are expecting the Fed Reserve to keep the interest rate in the 3.50%-3.75% band until the September 2027 FOMC meeting. The chart reveals a 38.7% probability of rates remaining in the current band.

Meanwhile, the likelihood of slight rate cuts around 3.25% – 3.50% is 38.6%. By contrast, the probability of a rate hike is only 1.2%, which shows the expectation that easing is a long time away.

The expected pause comes as Jerome Powell is chairing his final FOMC meeting. His tenure will end in May and the committee will next meet in June.

Although Powell is eligible to stay on the Board of Governors until 2028, history would suggest he could choose to retire. This would open the door for Kevin Warsh, who has been named Powell’s successor. Meanwhile, the Department of Justice (DOJ) dropped the probe against Powell, which boosts Warsh’s confirmation odds.

Fed policymakers are not expected to change their tone in the coming FOMC meeting. “We expect Powell’s overall tone will be consistent with a Fed that expects to be on hold for some time,” said Deutsche Bank’s Chief Economist Matthew Luzzetti and his team in a note.

Geopolitical Tensions Influence Fed’s Decision

Amid the FOMC meeting, the central bank is also cautious in response to geopolitical events. The Fed officials are watching the effects of the Iran crisis on the economy, which has created conflicting signals. The conflict has pushed up energy prices, further fueling inflation, but also created uncertainty, which weighs on business confidence and investment.

These competing forces make it harder for the Fed to achieve its two-pronged objective of price stability and full employment. Rates higher for longer might keep inflation in check, but it could slow growth. However, cutting rates could boost growth and the jobs market but could also fuel inflation.

Now, Warsh is awaiting a Senate vote on April 29. If confirmed, Warsh is likely to have a distinct perspective. Previously, he has been critical of the Federal Reserve’s balance sheet policy in the past. These include its sizable holdings of Treasury and mortgage-backed securities following the global financial crisis.