Summary of the Federal Reserve Conference - April 29, 2026

The Federal Open Market Committee (FOMC) convened on April 29, 2026, where it was decided to maintain the US interest rates within the range of 3.5% to 3.75%. This meeting marked the last conference for Jerome Powell as the Chair of the Federal Reserve, where he provided insights into the current economic landscape and the Fed's monetary policy direction.

Key Takeaways from Jerome Powell's Statement:

• Economic Growth: The US economy is experiencing sustained growth, although job creation has been weak. The unemployment rate remains stable.
• Geopolitical Risks: Ongoing events in the Middle East are contributing to uncertainty and pose risks to the economy and the Fed's mandate.
• Inflation Outlook: The short-term inflation outlook has worsened, primarily due to rising energy prices. However, long-term inflation expectations are still aligned with the Fed's target of 2%.
• Monetary Policy Flexibility: Powell emphasized that monetary policy is not on a predetermined path. Future decisions will be made based on data and assessed on a meeting-by-meeting basis.
• Tenure Extension: Powell will remain in his role until the Department of Justice investigation concludes, extending his tenure beyond May 15, 2026, while maintaining a low profile.
• Tariff Impact: The Fed anticipates that the tariffs imposed during Trump's administration will have a one-off effect on prices, with no long-term inflationary pressures expected. Tariff-related inflation is projected to decrease over the next two quarters.
• FOMC Member Sentiment: There has been an increase in the number of FOMC members who believe that rate hikes are as likely as cuts, indicating a shift in sentiment regarding future monetary policy.
• Future Guidance: Guidance on interest rates may change in the upcoming meetings, reflecting the evolving economic conditions.

Market Reactions:

Following the Fed's announcement, there were significant movements in the forex market. The Eurozone's economy showed signs of slowing unexpectedly, leading to fluctuations in the EUR/USD exchange rate, which fell below 1.1700. Additionally, the European Central Bank (ECB) and the Bank of England both decided to keep their interest rates unchanged, contributing to the overall market dynamics.

This conference highlighted the Fed's cautious approach amid economic uncertainties and the potential for future adjustments in monetary policy based on evolving economic data.