Jerome Powell said the Fed isn’t cutting rates this time. On Wednesday, the Federal Open Market Committee voted to hold the federal funds rate between 3.5% and 3.75%, ending its streak of three straight cuts.
Powell didn’t say much more than he had to. No new direction, no farewell tour, just one long pause.
This meeting played out like a wait-and-see moment. The last three rate cuts were called “maintenance,” just in case the labor market got shaky. But now that job gains are weak but steady, and inflation is still slightly high, Powell said the central bank can afford to stay put.
“If you look at the incoming data since the last meeting, [there is] clear improvement in the outlook for growth,” Powell said. “Inflation performed about as expected, and… some of the labor market data came in suggesting evidence of stabilization.”
Trump-appointed governors break from Powell over another rate cut
Not everyone agreed. Stephen Miran and Christopher Waller, both put on the board by President Donald Trump, voted for another quarter-point cut. This was Miran’s fourth time voting no.
Powell even pushed for a bigger half-point cut before. His term ends this Saturday, while Waller was also in the running to replace Powell, but he’s not seen as the likely pick.
The committee said they’re now more confident about the economy. Their post-meeting note said:-
“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated.”
Powell has only two meetings left before his term as chair ends in May. His time at the Fed has covered a pandemic, a deep recession, and nonstop fights with Trump. But Powell kept it cold and dry. He refused to say whether he plans to stay on past May, even though his governor term lasts until 2028. “I have nothing for you on that,” he told reporters.
He said the same thing when asked about grand jury subpoenas related to the Fed’s building-renovation project, which is now part of a Justice Department investigation. “I have nothing for you on that,” Powell said again.
Powell stresses Fed independence and fires back at model critics
Powell said the Fed must stay free from politics. “When central banks lose independence from political pressures, it’s hard to restore the credibility of the institution,” he said. He doesn’t think the Fed is in danger, though. “I don’t believe we will, I hope we won’t certainly.”
He didn’t name names, but his advice to the next chair was clear: stay out of politics. “Don’t get pulled into elected politics.” He said the next person in his seat should still meet with lawmakers. He called that part of being “democratically accountable.”
He also took a second to talk about the Fed’s staff, calling them “the most qualified group of people you will ever work with.” That’s where the compliments stopped.
Powell shut down talk that the Fed relies too much on outdated models. He said the team is fully aware that tech might be pushing productivity higher. “We’ve been discussing this for years now.” He also said when there’s a conflict between GDP data and job numbers, it’s the jobs data that usually tells the real story.
We’ve seen strong GDP numbers lately; 3.8% and 4.4% for Q2 and Q3 of 2025. But Powell said those might be making the economy look stronger than it really is, since job growth has slowed way down.
On criticism of the Fed’s forecasting tools, Powell didn’t back down. “No model can accurately predict what will happen in the economy, especially one that is constantly changing and full of large, unpredictable events like the pandemic and the trade war,” he said. Then he added, “Bring them on,” to anyone who thinks they can build something better.
At the end, Powell summed up the whole day with one line. “I’m tempted to call this the ‘Nothing for you’ press conference.”
