The Federal Open Market Committee of the US Federal Reserve will end its two-day meeting today. The FOMC meeting on April 28-29 will decide whether to keep the fed funds rate unchanged at 3.5%-3.75% or cut. The US Fed chair Powell is announcing the FOMC decision on rates on Wednesday at 2pm ET. The live streaming of the FOMC meeting can be watched on the YouTube channel of the US Federal Reserve.
The US Fed continues to face challenges from economic uncertainty and inflationary risks. The Iran war has led to a significant surge in oil prices, over 50% in the last 10 weeks. This is likely to push inflation higher if oil prices stay higher for longer.
The rate cut outlook in 2026 also appears dim. “During the March 2026 FOMC, the Federal Reserve struck a relatively balanced tone. While the underlying inflation backdrop could have justified a more hawkish stance, the Fed chose to remain measured given the early stages of the Iran conflict and the uncertainty around its economic implications.
That uncertainty has now largely been resolved. The prolonged disruption in the Strait of Hormuz has meaningfully altered the energy outlook, with oil prices expected to remain elevated for an extended period. This introduces a more persistent inflationary impulse, particularly through energy and second-order effects on input costs.
Against this backdrop, we expect the upcoming Fed statement to shift more decisively hawkish, with a clear signal that rate cuts are unlikely in 2026 under current conditions,” says Nachiketa Sawrikar, Fund Manager, Artha Bharat Global Multiplier Fund.
Powell’s Press Conference
Markets expect no change from the Fed’s FOMC meeting today, but all eyes will be on Powell’s press conference. “The Federal Reserve is widely expected to hold the federal funds rate steady at 3.50%-3.75% when its meeting concludes on Wednesday. With no fresh economic projections or dot plot to guide markets, attention will shift to Chair Jerome Powell’s tone and the statement’s language,” says Ajitabh Bharti, Co-founder and Executive Director, CapitalXB.
Incidentally, it will be Powell’s last presser as the Fed Chair. The next FOMC meeting is on June 16-17, after Powell resigns as chair in May.
“While the rate decision itself appears straightforward, the tone of forward guidance will be the key market focus. Recent FOMC communications suggest a slight hawkish tilt, with policymakers emphasizing the risk that energy-driven inflation could become more persistent,” says Umesh Sharma, CIO-Debt, The Wealth Company Mutual Fund.
“The March dot plot already showed a shift among members toward fewer rate cuts in 2026, even though the median projection still points to at most one cut later in the year,” adds Sharma.
In May, Powell will resign in favor of Kevin Warsh, Trump’s nominee, who is undergoing Senate confirmation on Wednesday.
Although Powell will be resigning as Chair, it is uncertain if Powell will continue on the Board of Governors since he previously mentioned he would stay until a Justice Department investigation against him is dropped, which has now been dropped. Despite pressure from the White House and President Trump, Powell and other FOMC members maintained their decisions on rate cuts.
“This meeting also carries added significance as it is expected to be Chair Jerome Powell’s final one before Kevin Warsh assumes the chair, pending confirmation. Markets will therefore listen closely for any signals on how unified the Committee is ahead of the leadership transition, as a divided FOMC could make an early rate cut path under the new chair more challenging,” says Sharma.
Overall, markets will focus on three things in April’s FOMC meeting – The reasons, according to Powell and his team, behind the US Federal Reserve’s decision to maintain current interest rates. Secondly, markets will look for cues from Powell’s presser on potential indications of future rate adjustments. Thirdly, any cues on the upcoming leadership transition of Fed Chair Jerome Powell that may add to the uncertainty surrounding the central bank’s direction.
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