Tag: Interest Rates

Bank of England Keeps Interest Rates on Hold

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Today, the Bank of England’s (BOE) Monetary Policy Committee (MPC) in a split vote, voted 6 – 3 to keep interest rates on hold in a range of 3.5% – 3.75% for the fifth time in a row. The three members of the MPC who voted to increase interest rates by 25 basis points, to 4.00%, were external members: Catherine Mann, Megan Greene and Chief Economist Huw Pill. Once again, officials reiterated earlier statements, and maintaining guidance stressed that “the panel were ready to act” to halt lingering inflation. 

UK officials are signalling that domestic price pressures are easing quicker than earlier predictions, despite tensions in the Middle East with an ‘on-again off-again’ war where currently, Iran and the USA have reopened hostilities. BOE officials further noted that there were clear signs of easing on the domestic inflationary front. They also highlighted evidence suggesting that higher prices and increased wage demands resulting from the energy shock were indeed scarce.

BOE Governor, Andrew Bailey, said after the meeting that, “There is little evidence of second round effects, although it is too early to take much comfort in that. Holding bank rate is appropriate as global conditions look to be more uncertain and inflationary, while domestic conditions are, on balance, more benign as regards the prospects for inflation”. Given the tone of the Governor’s take on today’s decision, experts suggest that the core of the MPC appear to be nowhere close to voting for an increase in rates. 

Some analysts believe that the committee could change their thinking if energy prices increase,second-round inflationary effects materialise, or the Middle East conflict escalates. Officials noted that inflation is currently below the level that the central had previously predicted, but the bank does expect that in the coming months, the economy will witness an increase in price growth. This means consumers will experience an increase in household energy bills alongside a fresh rise in costs at the fuel pumps.

The BOE has issued a number of inflation forecasts showing differing scenarios for the cost of oil and gas. First, they restored their original forecast from April, which was based on a prediction through to the 20th of July pointing to inflation hitting 3.2% by close of business 31st December 2026, before returning to circa 2.00%, the bank’s benchmark target in 2027. The second scenario which shows Brent Benchmark crude hitting the $100p/bl mark and remaining above that mark shows a pessimistic prediction of inflation reaching the 4.5% mark in Q2, 2027. The third scenario by Q2, 2027, shows inflation peaking at 3%, with a downgraded prediction of second round effects* if there is a faster resolution to the current conflict in the Middle East. 

*Second Round Effects – In these scenarios, second round effects are price and wage-settings stemming from the current shock that have the potential to raise Eurozone inflation beyond the near-term in a persistent manner.

Interestingly, in all of the above scenarios, GDP growth is predicted to be circa 1%  in 2026 and 2027, before gaining some positive traction in 2028. Experts suggest that the MPC’s concerns on second-round effects appear to have receded as there seems to be a more dovish attitude, suggesting that inflation will not negatively impact broader inflation. After the rate hold, the swaps and futures markets have trimmed their expectations for an increase in interest rates at the upcoming policy meeting on 17th September 2026, pricing in a roughly 40% implied chance for an increase in rates.

Federal Reserve Keeps Interest Rates on Hold

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Players in the financial markets have recently been at odds with one another as to whether or not the Federal Reserve would hike or keep interest rates on hold. Today, the FOMC (Federal Open Market Committee) kept rates steady at a range of 3.5% – 3.75%, marking the fifth consecutive meeting that the central bank has opted to keep rates on hold. Policymakers voted by 9 – 3 in favour of a rate hold with Cleveland Federal Reserve, President Beth Hammack, Minneapolis Federal Chairman, Nel Kashkari, and Dallas Federal Reserve, President Lorie Logan, being the three dissenting voices who all voted to hike rates.

Officials hinted that an interest rate rise could arrive this September, as the continuing Middle East conflict has ensured a rapid rise in energy prices. Officials suggest this could be a catalyst for an increase in headline inflation, which in June this year fell to 3.5%, the first decline in five months, but still remains elevated above the central bank’s target of 2%. Indeed, the inflation rate has remained elevated above the Federal Reserve’s target for more than five years, with a dissenting governor, the Dallas Federal Reserve Chairman saying, “Every month of above-target inflation has compounded the strain on Americans’ budgets”.

In a post-meeting press conference, Federal reserve Chairman Kevin Warsh explained why interest rates were not raised this time around by saying, “If inflation continues to be elevated through the forecast period, interest rates could well be part of that solution, but I wouldn’t say it’s in isolation”. The Chairman went on to explain that market rates since their last policy meeting had climbed anyway, suggesting that investors are doing some of the work for the Federal Reserve. The chairman stated that this was partially due to his decision to row back on future potential rate moves the central bank usually offers in on-going statements. He added, “Markets have made decisions because we stepped back in part from trying to influence them. Market judgements have moved up on what nominal rates are across the Treasury curve”.

Experts point out that combined with an AI fed boom in demand, the current on-going US/Iran/Israel conflict, (now almost five months old), and a new slate of tariffs, inflation could remain in an elevated position for some time to come. Indeed, with the stop go policies regarding the Middle East conflict emanating from the White House, the price of crude oil bounces between above $100p/bl to somewhere between $85 – $90p/bl, suggesting that if the war stopped tomorrow, consumers would not see their energy bills decrease for many months to come. 

Analysts point out that some of the pressure was taken off policymakers to raise rates due to data confirming a reduction in inflation last month, with consumer prices falling for the first time since 2020. However, policymakers remain under pressure from when the White House restarted the Middle East conflict, which sent oil prices past the $100p/bl mark, despite the fact it now hovers around the $83p/bl mark. Analysts point to the swaps/futures markets which are pricing in circa 70% possibility of a 25 basis point rate hike at the FOMC’s next policy meeting on September 15 – 16, 2026, which would lift the target range of Federal Funds from 3.50% – 3.75% to 3.75% – 4.00%. Indeed, driven by persistent inflationary pressure and hawkish dissent within the FOMC, short-term interest rate swaps and futures are favouring tightening over cuts.

ECB Keeps Interest Rates on Hold

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Today, in an unanimous decision, the ECB’s (European Central Bank) Governing Council voted to keep its Benchmark deposit facility rate on hold at 2.25%. The main financing operations rate and the marginal facility were also held steady at 2.4% and 2.65% respectively*. After last month’s rate hike of 25 basis points, experts suggest that a rate increase is on the table at the governing councils next interest rate meeting on September 13th – 14th in Frankfurt main. 

*ECB Interest Rates – The ECB has three interest rates; the Key Deposit Rate is the interest rate banks receive when they deposit money overnight with the ECB. The other two facilities are the Main Refinancing Operations, which is the rate the banks pay when they borrow money from the ECB for one week, and the Marginal Lending Facility is the rate banks pay when they borrow money overnight from the ECB.

Indeed, after the interest rate announcement, ECB President Christine Lagarde announced that there could be a possible rate hike in September having rejected a move to increase rates today. She went on to say, “we were positioned adequately  to wait and be very attentive in the next few weeks to the development of the situation and to the data that we will be receiving in the next few weeks”. Although the decision was unanimous, President Lagarde noted that there were some governors who asked themselves whether we should consider a hike in interest rates. 

As the ECB held their meeting, crude oil prices once again hit the $100p/bl mark for the first time since March this year after Iranian backed Houthi militia claimed responsibility for attacking two Saudi Arabian tankers in the Red Sea, which will create further disruption in the supply of crude oil. President Lagarde has referred to the Houthi attack as an alarming warning that inflation projections could be higher than expected, but pointed out that the ECB was well positioned to navigate the uncertainty caused by the present conflict.

President Lagarde also pointed out that the central bank has yet to see signs of second-round inflation effects*. Indeed, the President added that if the bank were only concerned about second-round effects, the ECB would have today hiked interest rates, and she was quoted as saying, “ we are not at that stage where we’re seeing those emergent signs of second-round effects”. Experts suggest that the September meeting is considered the natural point to deliver a rate increase as there will be more economic data, including inflation for two months and various business surveys.

*Second Round Effects – In these scenarios, second round effects are price and wage-settings stemming from the current shock that have the potential to raise Eurozone inflation beyond the near-term in a persistent manner.

Indeed, analysts advise that the swaps market implies that a 25 basis points increase in interest rates is a near certainty with financial markets fully pricing in a further increase in interest rates in December. Lagarde finished by noting that “the full effects of the energy shock have yet to play out, however energy price inflation had declined in June that it had risen since the start of the conflict and its impact on food, goods, and services is likely to keep inflation well above target into 2027”.

The Bank of England Keeps Interest Rates on Hold

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Today, the BOEs (Bank of England) MPC (Monetary Policy Committee) voted by 7 – 2 in favour of keeping interest rates steady at 3.75% with two dissenting members of Huw Pill and Megan Greene both voting to increase the rate by 25 basis points to 4.00%. The BOE has advised that inflation would pick up to just over 3.25% in Q4, lower than previously forecasted in April of this year. The decision to keep interest rates on hold came in the wake of data released showing the UK’s unemployment rate falling to 4.90% in the three months to April.

Recent data released from the ONS (Office of National Statistics) shows that the number of United Kingdom job vacancies fell to its lowest level for five years as businesses cut back on recruitment. On the inflation front the Governor of the BOE Andrew Bailey has advised that there “still is some inflationary pressure in the pipeline” with the Middle East crisis weighing negatively on energy and pushing up prices. He also stressed the political neutrality of the BOE but underlined the fact that political stability is critical during sensitive moments such as the upcoming Makerfield by-election as monetary policy relies on predictability.

Megan Greene, one of the two dissenting voters looking for a ¼% hike in interest rates highlighted the uncertainty over the impact on households and businesses of higher energy prices. However, Governor Bailey was quoted as saying, “Energy prices have come down quite a lot, but they are still above where they were before this conflict started. Inflation is higher than we expected it to be”. He went on to say, “I think holding is the right position to be in at the moment for that, so I think it is a sensible decision in light of the news”. Experts noted that the MPC met just before the Iran/United States peace deal was signed and when the MPC meets again at the end of July votes may well be swayed when the success and longevity of the peace deal will be clearer.

Analysts advise that financial markets reacted with a cautious but dovish tilt to the BOEs decision to keep interest rates at 3.75%with a notable shift in Sterling weakness and a fall in equities, as investors interpreted the BOEs downgraded inflation outlook as a signal that disinflation is taking hold. The money markets are pricing in the potential for one rate hike by the close of business 2026, and the swaps market is currently pricing in a higher for longer trajectory for central bank base rates with no immediate return to lower interest rates. Currently, experts are suggesting there is a wait and see outlook as to whether or not the Iran/US peace deal holds.

Federal Reserve Holds Interest Rates Steady

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Today, and chairing his first FOMC (Federal Open Market Committee) meeting, the new Chairman of the Federal Reserve Kevin Warsh and all his colleagues on the FOMC voted unanimously to keep interest rates steady in the range of 3.50% – 3.75%. Rates remained unchanged despite the fact that headline inflation is currently 3.80% with core inflation sitting at 3.30% (excludes volatile energy and food costs) which is well above the Fed’s long-term target figure of 2.00%. The policymakers SEP (Summary of Economic Projections) raised their forecast for interest rates advising that there may be one rate hike between now and the end of the year.

Officials further advised that inflation remained in an elevated state partly due to supply shocks due to the United States/Iran Israel conflict which has caused energy prices to skyrocket. The Federal Reserve has a dual-purpose mandate where they have to keep inflation at the target figure of 2.00% whilst ensuring maximum employment. Signals emanating from inside the Federal Reserve suggest that policymakers now consider the employment market to be in a healthy state and are now going to concentrate on tackling inflation.

In his first post-meeting press conference as Chairman of the Federal Reserve, Kevin Warsh announced plans to overhaul the central bank with a particular eye on its public communications. He went on to advise he will create five new taskforces that will look into productivity and jobs, the Federal Reserve’s balance sheet, data, and broad conduct of monetary policy including communications. Language in the committee’s statement has already changed with Chairman Warsh acknowledging “It’s a bit shorter, a bit simpler and it dispenses with some older language. That statement just gives you the facts, as best we can judge it”.

The statement also noted that “Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong, job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated relative to the Committee’s 2.00% goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy”. Chairman Warsh told reporters that the Federal reserve is committed to reducing inflation to 2.00%.

Since President Trump took office for the second time there have been unprecedented attacks from the White House on the character and policy decisions of Chairman Warsh’s predecessor Jerome Powell. Under his watch the FOMC last cut interest rates on 10th December 2025, and he regularly incurred the President’s wrath as he was insisting the Federal Reserve cut rates on a regular basis. Interestingly, with a new hawkish stance in the Federal Reserve, Trump has withheld judgement on the new leader of the Federal Reserve (also Trump’s pick for the job), and has said “he will be guided by what he (Warsh) wants. An interesting about turn for a leader who is dead set on interest rate cuts. However, if rates do not come down sometime soon, we may see President Trump reversing to type with the new Federal Reserve leader coming in for a bit of White House wrath.

Bank of Japan

Bank of Japan Raises Interest Rates

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Today, the BOJ (Bank of Japan) voted by a majority of 7–1, (the one dissenting vote was board member Toichiro Asda) to raise its benchmark interest rate by 25 basis points to 1.00%, the highest interest rates have been for 31 years. Experts advise that the BOJ will continue to vote for interest rate increases every six months with the possibility of a further increase by the end of the year. The board met without Governor Kazuo Ueda, (the first time since 2010 that the board has voted without a Governor present), who is currently hospitalised with an illness. 

In the absence of the Governor, Deputy  Governor Shinichi Uchida chaired the meeting and in the post-meeting press conference said, “Compared with the previous meeting in April, the U.S. and Iran have signed a memorandum. That is a welcome. Having said that, there is uncertainty on the pace of improvement in distribution (of oil)”. He went  on to say, “The risk of a sharp deterioration in the economy  has diminished. On the other hand, prices are broadening, and there is a risk that underlying inflation may deviate from our target”.

On the pace of future rate hikes Deputy Governor Uchida said, “We will look at economic, price and financial developments, particularly with an eye on the Middle East situation, for the time being. We’ll look at whether the economy and prices are moving in line with our forecasts, as well as risks. With underlying inflation approaching 2.00%, we need to be mindful of upward price risks. We will guide policy so that we won’t fall behind the curve. The main difference between our previous meeting and this one is that downside risks to Japan’s economy have subsided significantly. Additionally, we have seen steady pass-through of costs in business-to-business prices, which led us to be more vigilant to inflation risks”.

Indeed, analysts advise that recent data shows that in May wholesale inflation* spiking to a 3-year high of 6.30% signifying that companies were passing on higher costs due to the energy shock created by the United States/Iran Israel conflict. However, they expect core consumer inflation to increase above the target inflation level of 2.00% later this year as it had originally fallen below the target level due to government subsidies aimed at curbing utility bills. The conflict in the Middle East has added complications to the policy path being pursued by the BOJ adding inflationary pressure through increasing costs of oil which hurts an economy that is heavily reliant on imported fuel and other energy derivatives.

*Wholesale Inflation – Measures the rising or falling costs of raw materials and goods in bulk before they reach the consumer.

Headline Inflation  – represents the overall increase in prices for goods and services within an economy, as measured in total consumption including  the volatile prices of food and energy.

Underlying or Core Inflation – Measures and tracks the long-term structural trend of consumer prices excluding volatile prices of food and energy.

The decision to raise rates is not only to tackle Japan’s inflation problems but it is also in an effort to stabilise Japan’s currency, the Yen, which has come under pressure from major currencies such as the Euro and the U.S. Dollar, with one expert commenting that there has been a sense that the Yen is too cheap and that raising the interest rate will not hurt. The Prime Minister Sanae Takaichi is renowned  for boosting spending in Japan but has not been critical of the BOJ’s interest rate policy even though she has previously been dismissive of rate hikes.

ECB Raises Interest Rates

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Today, the ECB (European Central Bank) voted in an unanimous decision to hike its key deposit interest rate by 25 basis points from 2.00% to 2.25%, with data confirming this is the first rate increase by the ECB since September 2025. The ECB also raised its main refinancing operations rate to 2.40% and their marginal lending facility rate to 2.65%, the difference in these three rates are explained below*. 

*ECB Interest Rates – The ECB has three interest rates; the key deposit rate is the interest rate banks receive when they deposit money overnight with the ECB. The other two facilities are the main refinancing operations, which is the rate banks pay when they borrow money from the ECB for one week, and the Marginal Lending Facility, which is the rate banks pay when they borrow money overnight from the ECB.

The interest rate hike came as no surprise to financial markets, with experts advising this move had been telegraphed by the ECB for quite some time. This decision is a clear reversal of the monetary easing approach taken by the ECB throughout most of last year, and analysts advise it is mainly due to energy prices rising by 10.90%, driving headline inflation to 3.20% in May (up from 3.00% in April). As data reveals, it is the highest since September 2023. Furthermore, core inflation (not including food and energy) hit 2.50% in May up from 2.20% in April, showing that it is not only energy prices that are being impacted from the USA/Iraq/Israel conflict.

The policymaker responsible for the ECB’s market operations, Isabel Schnabel, according to officials, was the board member who made her point most forcefully beforehand to raise interest rates today. She said whether or not a peace agreement in the Middle East occurs now, the duration of the current conflict and how the broader economy was reacting to increased energy prices, should force the ECB to raise interest rates. Schnabel also went on to say that inflation in the eurozone could hit 4.00% by the end of the year.

At a press conference, ECB President Christine Lagarde said, “We are beginning to see a broadening of inflation throughout the economy, and that is obvious in terms of direct effect – not yet at this point in front of the second round effects*, but we are going to be extremely attentive”. The President went on to say that, “Our discussions were predicated on, obviously the major energy shock that we have observed since the beginning of March, that is enduring longer than expected by geopolitical experts, and which we are beginning to see broadening throughout the economy”.

*Second round effects – In these scenarios, second round effects are price and wage-settings stemming from the current shock that have the potential to raise Eurozone inflation beyond the near-term in a persistent manner.

President Lagarde has kept her options open regarding further interest rates, and financial markets are predicting that the ECB may raise interest rates a further two or three times by the end of 2026. Traders are currently pricing in a deposit rate reaching up to 2.75% with swap markets heavily pricing in another 25 basis point increase.

The ECB keeps Interest Rates on Hold

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Yesterday, and for the third straight meeting, the Governing Council of the ECB (European Central Bank) voted unanimously to keep their key benchmark deposit rate steady at 2.00%. Financial markets were expecting a rate hold, as the ECB kept their three key interest rates* at their lowest level for more than two years. However, sentiment within the governing council is changing as growth is weakening on the downside and price pressures are building on the upside.

*ECB Interest Rates – The ECB has three interest rates, one being the key deposit rate, which as mentioned above was held at 2.00% and is the interest rate banks receive when they deposit monies overnight with the ECB. The other two facilities are the Main Refinancing Operations (rate held at 2.15%) which is the rate the banks pay when they borrow monies from the ECB for one week, and the Marginal Lending Facility (rate held at 2.40%), which is the rate banks pay when they borrow monies overnight from the ECB.

Indeed, officials noted that policymakers within the ECB will probably vote to increase interest rates at their next meeting in June, unless the crisis in the Middle East abates and there are some positive developments on energy prices. Those close to the ECB’s decision, while asking for anonymity, noted that there was little chance of avoiding a rate hike in June, but stressed that the situation is fluid and can change quickly.

President of the ECB, Christine Lagarde, said, “the next six weeks will be the right time to assess the economy in order to make an informed decision on verified and revisited information”. The president went on to say, “we made an informed decision on the basis of yet insufficient information. We debated the decision that we have unanimously taken today, but we also debated at length, and in depth, a decision to possibly hike”.

Experts advise that officials from the ECB have not been convinced from data received the need to tighten monetary policy, with the increasing prices of energy such as oil and natural gas yet to trigger “second round effects”*. In a statement issued by ECB officials, they said, “the upside risk to inflation and the downside risks to growth have intensified. The Governing Council remains well positioned to navigate the current uncertainty”.

*Second Round Effects – In these scenarios second round effects are price and wage-settings stemming from the current shock that have the potential to raise Eurozone inflation beyond the near-term in a persistent manner.

Analysts advise that financial markets suggest that ECB officials will prioritise an upswing in prices (by 3% in April), which are suffering negative effects from the USA/Iran/Israel crisis. Traders have accordingly priced in 75 basis points rise in interest rates by the end of the year. President Lagarde noted that, “there is one element that is going to have a real impact, and that is the duration of the conflict”.

Bank of England Keeps Interest Rates on Hold

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Today, the BOE’s (Bank of England) MPC (monetary Policy Committee) voted 8 – 1 to hold the benchmark interest rate steady ay 3.75%, with the Chief Economist, Huw Pill, being the only dissenting member voting to increase interest rates by 25 basis points. Interestingly, other members of the MPC acknowledged that in future meetings they might in fact join Mr Pill in calling for a rate increase.

Officials noted that in the Q3 of this year, they now forecast that inflation will be circa 1.4% higher than their original forecast in the last report issued this February. Indeed, Governor Andrew Bailey said, “holding rates was a reasonable place to be given the softness in the UK economy”, but argued that rates may well have to rise because of the disruptions to energy supplies due to the current Middle East situation. 

Clare Lombardelli and Dave Ramsden, both Deputy Governors, plus external members Catherine Mann and Megan Greene, all signalled that in the future, rates may need to go up tightening financial conditions. The MPC noted that it stands ready to act, should further data shows negative impacts on inflation, such language indicating they will raise interest rates if need be.

Governor Bailey said, “attempting to bring inflation back to target too quickly after a shock like this may cause undesirable volatility in output. There is not much monetary policy can do to prevent these cost increases from affecting UK businesses and households. Thursday’s wild swings in the oil price were an example of how the BOE simply cannot stop the music and make decisions based on a certain level of expected cost pressures”. 

Latest official data shows that the CPI (Consumer Price Index) rose to a three month high of 3.30% in March on the back of accelerating fuel prices. The price of motor fuels month-on-month saw the largest increase since June 2022, jumping by a spectacular 8.70% as disruption to transportation and oil production drove prices higher for both diesel and petrol. Officials of the BOE suggested that if the Middle East conflict were to continue and worsen, inflation could rise as high as 6.20%.

Due to the uncertainty surrounding the Iran conflict, the BOE this time round has not published any forecasts for inflation and other key economic indicators. Instead, the BOE has produced three scenarios based on energy prices and “second round effects”. In the toughest case, scenario C, they suggest that inflation could peak to around 6.20% in early 2027, and stay above the BOE’s 2.00% inflation target for years, forcing interest rates higher. 

Federal Reserve Keeps Interest Rates on Hold

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Yesterday, Jerome Powell, the Federal Reserve Chairman, officiated at his last FOMC (Federal Open Market Committee) meeting where benchmark interest rates were kept on hold for a third consecutive time at 3.50% – 3.750%. The increasing uncertainty with the Middle East crisis left the committee deeply divided voting by 8 – 4 to keep interest rates steady. This was the first time since October 1992 where four committee members dissented against the FOMC decision, with Governor Stephen Moran voting in favour of a 25 basis point cut. 

Three other Federal Reserve Presidents: Beth Hammack, Neel Kashkari and Lorie Logan of Cleveland, Minneapolis and Dallas respectively, all agreed to hold rates but dissented because they “could not support inclusion of an easing bias in the statement at this time”. Experts suggest that the dissents caught financial markets by surprise, and despite the nomination by President Trump of dove leaning Kevin Warsh* as the new Fed Chair, the vote could indicate a shift away from rate cuts at future meetings. 

*Kevin Warsh – He has passed a major hurdle to become the next Chairman of the federal reserve, as yesterday, he was approved by the Senate Banking Committee. The nomination now advances to a full senate vote with the earliest date being the 11th May 2026.

Analysts advise that money markets are betting that there will be no further rate cuts in 2026. However, analysts now suggest a better than 25% chance of a rate hike by early next year. This shift comes as oil prices climb back above $100/bbl, driven by the ongoing Middle East conflict and the continued blockade of the Strait of Hormuz, a chokepoint for 25% of the world’s oil. Experts advise the big fear for policymakers is that the current energy-driven price shock feeds into a broader, more consistent core inflation. 

On that note, US headline inflation for March 2026 jumped to 3.30%, the highest level since May 2024. Core inflation (excluding food and energy) also rose slightly to 2.60%, with policymakers still adopting a wait and see attitude towards inflation. However, on the employment front, the unemployment rate for now appears to have stabilised, but net hiring flattened out to just about zero over the past year. Experts and policymakers are suggesting this would make the labour market more vulnerable to shocks.

Finally, Chairman Powell’s tenure as the Chair of the Federal reserve ends on 15th May 2026, but under current rules he can remain on the board until January 2028. Historically, Fed Chairs typically resign from the Board of Governors entirely upon leaving the chair. However, Jerome Powell has opted to remain on the board, a decision that prevents President Trump from appointing a new governor who might align more closely with White House policies. Chairman Powell noted, “I plan to keep a low profile as a governor. There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair”.

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