29 April 2026
If you are covering the Federal Reserve’s decision to hold interest rates, please find below a comment from Lindsay James, investment strategist at Quilter:
“With Jerome Powell holding what is highly likely to be his final meeting today, it is rather apt he ends it with a hold in interest rates – the exact thing Donald Trump has chastised him for over a number of months. This meeting was always likely to end in a hold, with markets now pricing in no change to interest rates for the foreseeable future, and the expected series of cuts in 2026 now firmly off the table.
“Fed Chair nominee Kevin Warsh will arrive with the White House determined to see interest rates lowered, but in today’s economic environment even he shouldn’t be tempted to appease the President. Oil for December delivery is now at $86, up from $63 before the conflict and $74 in early March. Day by day, the expected length of the blockade gets pushed back and with it the timeframe for market normalisation and the potential for rate cuts.
“This will undoubtedly prove inflationary in the short term with the market indicating US CPI is likely to be in the region of 3.25% in a years’ time, around a percentage point higher than before the war began. The risk is that the longer this continues, the more likely it is that higher oil prices will bleed into other areas of inflation, setting off a chain reaction.
“But signals from incoming Chair Kevin Warsh imply that he will continue the existing policy to look through short term volatility, given the expectation that oil prices will fall sharply as soon as normal conditions return. Indeed with the announcement of the UAE leaving OPEC, this could put further downward pressure on prices in the medium to long term whilst recent surveys indicate US production is unlikely to fill the gap given the wide swings in oil prices caused by regular late-night pronouncements from the White House that seek to raise markets and depress energy prices. For now, volatility on multiple fronts prevents any rate cuts from being considered.”
