Fed Holds Interest Rates as Powell Exits Under Pressure from Trump

The Federal Reserve decided to keep interest rates unchanged at its latest meeting.

The announcement comes amid political tensions, inflationary pressure, and a global environment shaped by conflicts that increase economic uncertainty.

Why it matters: The Fed interest rates 2026 decision directly impacts loans, mortgages, credit cards, and savings.

It also comes at a key moment of leadership transition and under pressure from President Donald Trump to lower rates.

The Federal Reserve Decision: Interest Rates Unchanged

The Federal Open Market Committee decided to maintain the federal funds rate target range between 3.5% and 3.75%.

According to the official statement, the U.S. economy continues to show signs of solid expansion. However, it also acknowledges that inflation remains elevated, partly driven by rising global energy prices.

The institution reiterated its goal of achieving maximum employment and bringing inflation down to 2% over the long term, which will guide any future decisions on rate cuts or increases.

Fed interest rates 2026 – PHOTO: Shutterstock

An Economic Environment Full of Uncertainty

The decision comes in a context marked by international volatility. Events in the Middle East, especially tensions involving the United States, Israel, and Iran, have increased uncertainty about economic outlooks.

BREAKING NEWS | The Fed keeps rates at 3.5% in the latest meeting with Powell leading the way https://t.co/G5SCXswyHb pic.twitter.com/WeN4bapymU

— expansioncom (@expansioncom) April 29, 2026

Rising energy prices are one of the main factors pushing inflation higher, complicating the possibility of rate cuts in the short term.

Additionally, while the economy continues to grow, job creation has remained modest on average, and the unemployment rate has changed little in recent months, reflecting a stable but not strongly expanding labor market.

Powell Steps Down After Years of Pressure

This meeting marks one of the final acts of Jerome Powell as head of the Federal Reserve, as his term ends on May 15.

Fed interest rates 2026 – PHOTO: Shutterstock

In recent months, Powell has faced constant pressure from President Donald Trump, who has insisted on lowering interest rates to stimulate the economy.

Despite this, the Fed has maintained a cautious stance, prioritizing inflation control over potential monetary stimulus.

Fed Interest Rates 2026: Pros and Cons for Consumers

This decision has direct effects on the daily lives of millions of people, both positive and negative.

On one hand, keeping rates high helps contain inflation. This means that, in the medium term, prices for essential goods such as food, gasoline, and housing could stabilize, protecting purchasing power.

It also benefits savers, as returns on savings accounts or conservative investments tend to be higher.

However, there are clear downsides: Credit remains expensive, affecting those looking to buy a home, finance a car, or use credit cards. High rates increase monthly payments and limit access to financing.

Additionally, companies may slow investments or hiring due to the high cost of money, which could impact employment in the future.

Kevin Warsh and the Future of the Fed

The future of the Federal Reserve now points toward a leadership change. Kevin Warsh, a candidate backed by President Donald Trump, is getting closer to assuming the leadership after his nomination advanced in the Senate.

Warsh will inherit an institution at a complex moment, with political pressure to lower rates and inflation that recently reached its highest level in nearly two years.

The economic outlook also suggests that any rate cuts could be delayed. Many analysts expect the Fed may postpone reductions until late 2026 or even 2027.

Fed interest rates 2026 – PHOTO: EFE

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What’s Next: Key Decisions for the U.S. Economy

The Federal Reserve made it clear that it will continue carefully evaluating data before making new decisions. Factors such as the labor market, inflation, and global conditions will be decisive.

The institution also reiterated that it is prepared to adjust monetary policy if risks emerge that threaten its objectives.

For consumers, this means high rates could remain in place for longer, affecting borrowing costs and financial decisions.

Powell’s departure and the arrival of new leadership open a new chapter for the Fed, at a time when every decision has a direct impact on the economy of millions of people.