part of our initiative to bring timely market information to California public agencies, CalTRUST Chief Executive Officer Laura Labanieh Kitson had a brief Q&A with State Street Investment Management’s Vice President, Portfolio Strategist Will Goldthwait to reflect on this week’s Federal Reserve meeting:
The Hold, the Split, and the Powell Epilogue
Laura: What did the FOMC decide at this meeting?
Will: In a decision that surprised exactly no one, the FOMC held the policy rate steady at 3.50%–3.75%. The Committee once again leaned on the idea that policy is “well positioned,” which is central‑bank shorthand for “we’re uncomfortable, but not uncomfortable enough to move.” With inflation still elevated, helped along by higher energy prices and the labor market no longer collapsing but not exactly flexing either, the Fed chose patience over panic. Markets responded with a collective shrug (yields slightly higher), having priced this outcome weeks ago and mentally moved on.
Laura: Why did this meeting feel more consequential than a routine ‘on hold’ decision?
Will: Because this wasn’t just a policy meeting—it was a leadership transition announcement wrapped in a press conference. Chair Powell confirmed that he will no longer serve as Chair after May 15, formally closing that chapter, but he also made clear that he will remain on the FOMC as a Governor until he feels fully confident that all legal matters involving the Fed have been resolved. That nuance mattered: Powell is stepping aside, not disappearing, which reassured markets that institutional continuity still has adult supervision. The tone shifted visibly from policy quarterbacking to legacy management, with Powell carefully avoiding anything that could box in his successor and stated specifically he was staying on to protect the Fed from future political attacks. Think of it as him handing over the keys—but staying in the passenger seat in case the car starts making strange noises.
Laura: Who dissented at this meeting, and what were they dissenting about?
Will: This meeting produced four dissents, the most since 1992, and they were pointing in different directions, which is what really got us excited. Governor Stephen Miran dissented because he wanted an immediate 25 bp rate cut (shocker), arguing that policy remains too restrictive given rising labor‑market risks and that energy‑driven inflation should be looked through. He’s been yelling into the forest on this since he joined. More interestingly, Beth Hammack (Cleveland), Neel Kashkari (Minneapolis), and Lorie Logan (Dallas) all supported holding rates steady but objected to the inclusion of an easing bias in the statement, worrying that hinting at cuts could loosen financial conditions too early. This highlights that there remains a stronger bias to keep rates higher for longer than to cut rates. These dissents are not dysfunction, as much as the news media wants you to believe that. It’s a committee debating whose model is right!
Laura: What did Powell emphasize in what was effectively his final press conference as Chair?
Will: Powell delivered a classic closing performance: calm, disciplined, and aggressively supportive of the institution and its independence. He emphasized that policy is well positioned, uncertainty remains elevated, and there is no urgency to act before seeing more data, especially with geopolitical and energy risks still muddying the outlook. Just as importantly, he refused to offer forward guidance that might lock in the next Chair, repeatedly steering questions back to process rather than promises. The underlying message was clear: the Fed will move when the data allows it to—not when markets, politicians, or calendar math get impatient. It was less a roadmap and more a reminder that the Fed still reserves the right to change its mind.
Laura: What’s the bottom line for markets and the path ahead?
Will: The big takeaway is that the easing cycle is delayed, not dead, and the Fed is now firmly in committee‑driven mode as leadership changes. The unusually large number of dissents highlights real debate, and not an imminent policy shift, just disagreement about timing and messaging. Markets focused on that split, particularly the three decent wanting to remove an easing bias. Perhaps the Fed won’t ease at all this year, and Kevin Warsh will have his hands full building consensus.
Source: Federal Reserve, Bloomberg, as of April 29, 2026