Traders and economists anticipate that the Federal Reserve will maintain interest rates within the 3.50% to 3.75% range. The primary question for traders is whether Chairman Powell will continue to serve on the Committee following this meeting.
The April 2026 FOMC meeting will conclude at 2:00 PM ET on Wednesday, March 18. A press conference with Federal Reserve Chair Jerome Powell will begin at 2:30 PM ET.
Market participants are confident that the Fed will hold rates steady. At the time of writing, according to the CME FedWatch Tool, federal funds futures traders are pricing in a 100% probability of unchanged rates. Even looking toward the end of the year, traders are pricing in only about a 20% chance of a rate cut.
Assuming the Fed holds rates as expected, market focus will immediately shift to the central bank's monetary policy statement and what is anticipated to be FOMC Chair Powell's final press conference. Analysts will seek insights into how the Fed views labor market and inflation trends, especially following the spike in energy prices triggered by the Iran conflict.
A key point in the statement will be whether the Committee changes language regarding the "extent and timing of further adjustments" to more neutral and balanced wording, thereby downplaying any suggestion that rate cuts could occur soon.
Recent reports indicate that Senator Tom Tillis is firmly committed to advancing Kevin Warsh, President Trump's personally selected candidate for Fed Chair. This week's FOMC meeting is thus expected to formally be Jerome Powell's last as Chairman.
Chair Powell, who has officially led the world's most important central bank for over eight years, leaves behind a reputation for actively building consensus and supporting the central bank's efforts to enhance external communication.
While Powell's term as Chairman is ending, traders are focused on whether he will remain on the Committee to complete his 14-year term, which officially expires in June 2028. He has previously stated publicly that he intends to remain on the Board unless the investigation into the Fed's renovation project is "conclusively closed." Although the investigation has now been transferred to Congress, with a small chance the Justice Department could reassume control, Powell is still thought to favor staying.
For traders, the implications are relatively straightforward: If Powell indicates he will resign his seat, this would remove an obstacle for Warsh's appointment and, all else being equal, would likely exert downward pressure on longer-term interest rates. Conversely, if Powell chooses to remain on the Committee, this would weaken Warsh's influence and could lead to a sustained, gradual increase in rates over time. Institutional reforms supported by Kevin Warsh, such as eliminating the dot plot, reducing press conferences, or changing the central bank's inflation target, would face greater resistance.
Beyond this, Powell is likely to emphasize that, given uncertainties from the ongoing conflict in the Middle East, the FOMC remains unified in its support for the current interest rate range. As noted last month, the Iran conflict pressures both aspects of the Fed's dual mandate: first by increasing energy costs and thereby inflation, and second by impacting a labor market that had already slowed in the latter half of last year. This situation would present a difficult start to a potential Warsh term, forcing him to navigate between a President strongly advocating for lower rates and economic data showing still-elevated inflation alongside a labor market characterized by low employment growth and low layoffs.
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