Jerome Powell will hold his press conference knowing that his potential successor is being confirmed in parallel. If approved by the Senate, the new Federal Reserve Chair, Kevin Warsh, would preside over the FOMC meeting for the first time on June 16 and 17.

With the discontinuation of criminal investigations against Powell last week, a political hurdle to Warsh’s confirmation has been removed. A Republican senator had made this a condition before agreeing to vote on the nomination. District Attorney Jeanine Pirro, considered an ally of US President Donald Trump, had initiated proceedings against Powell over allegedly excessive renovation costs at the Fed’s headquarters in Washington.

No Change in Key Interest Rates Expected

Powell, who has served as Fed Chair since 2018, described the proceedings as an attempt to influence the central bank’s work. «The threat of prosecution is a consequence of the Federal Reserve setting interest rates to the best of its knowledge and belief in the public interest, rather than following the preferences of the president,» he said in January.

The vast majority of economists do not expect any change in key interest rates on Wednesday. Markets have already fully priced in a hold at 3,50–3,75 percent. Given rising oil and energy prices, the Fed is likely to keep its powder dry and wait to see how inflation, the labor market, and economic growth evolve.

Permanently or Only Temporarily Higher Oil Prices?

The tone will likely be more decisive. Economists expect a wait-and-see approach, with Powell avoiding any clear signals toward rate cuts.
Energy inflation is the key factor. If the Fed assesses higher oil prices as persistent rather than temporary, expectations for rate cuts could be pushed further into the future.

Leadership Change as a Source of Uncertainty

The transition to Warsh could add another layer of uncertainty. Markets may be inclined to price in a more «dovish» stance under Kevin Warsh. However, monetary policy is determined by the entire FOMC, not by the chair alone.
This gives added weight to the policy decision, as it comes amid oil-driven inflation, slowing economic growth, a potential leadership change at the Fed, and a packed earnings calendar for major tech companies.

Stagflation Concerns Are Rising

The consumer price index (CPI) for March stood at 3,3 percent—a two-year high—primarily driven by the Iran conflict and the resulting increase in energy prices. At the same time, US GDP for the fourth quarter of 2025 was revised down in its third estimate to just 0,5 percent. Rising prices, slowing growth, and a central bank with limited room to maneuver are fueling concerns about stagflation.

Will Powell Remain a Fed Governor?

There will be no new forecasts or dot plot at this meeting. This means the Fed will communicate primarily through its wording, and any changes in language will be scrutinized closely. One question that will certainly be raised at the press conference is whether Powell plans to remain a member of the Fed’s Board of Governors—and thus of the FOMC—until 2028.