WSJ What’s News
Fed Holds Rates Steady and Ends the Powell Era Deeply Divided
Why It Matters
Understanding the Fed’s internal split and leadership change is crucial for investors anticipating future monetary policy moves. The Supreme Court decision and rising war costs signal significant political and fiscal shifts that could reshape elections and budget priorities, making this episode highly relevant for anyone tracking the U.S. economy and policy landscape.
Key Takeaways
- •Fed kept rates unchanged, record dissent signals policy uncertainty
- •Powell stays on board amid Justice Department investigation
- •Kevin Warsh nominated, expected to face internal opposition
- •Supreme Court narrows Voting Rights Act, could reshape minority districts
- •Pentagon reports $25 billion cost for Iran operation
Pulse Analysis
The Federal Reserve left its policy rate unchanged, a move that matched market expectations but surprised analysts with the highest dissent since 1992. Four of the twelve voting governors broke ranks—one pushing for a cut, three warning against premature easing—signaling deep uncertainty about the next direction. Jerome Powell, speaking at his final press conference as chair, announced he will remain on the Board of Governors while a Justice Department probe proceeds, underscoring concerns over Fed independence. The Senate Banking Committee advanced former governor Kevin Warsh as Powell’s successor, a nomination that will likely encounter resistance from the dissenting members.
The Supreme Court’s 6‑3 ruling trimmed the Voting Rights Act, declaring race‑based districting unconstitutional even when intended to protect minority voters. By stripping the preclearance safeguard, the decision opens the door for states to redraw congressional maps that dilute Black and Hispanic majorities, potentially flipping safe Democratic seats to Republican control. Analysts warn that the immediate impact will vary by state, with some redistricting cycles too late for the 2026 midterms. Meanwhile, Florida’s GOP‑controlled legislature approved a new map that could add up to four Republican House seats, illustrating the ruling’s tangible political consequences.
The Pentagon disclosed that Operation Epic Fury in Iran has already cost roughly $25 billion, primarily for munitions, aircraft and naval deployments, and the figure is expected to rise as the conflict continues. In corporate news, Finland’s elevator maker Kone agreed to acquire Germany’s TK Elevator for about €24 billion—approximately $26 billion—creating the world’s largest elevator provider with over 100,000 employees. Tech giants also reported earnings; Meta posted a 33% revenue jump to $56 billion but saw its stock dip over AI‑centered spending. A separate health study linked marriage to lower cancer risk, noting unmarried men face 68% higher rates and unmarried women 83% higher.
Episode Description
P.M. Edition for April 29. In an unusual move, Federal Reserve Chair Jerome Powell said today that he plans to stay on the Fed’s board after his term as chair ends next month. WSJ economics reporter Matt Grossman explains Powell’s reasoning, and what divisions within the central bank could mean for interest rates. Plus a Supreme Court decision today limits how states use voters’ race to draw voting districts. James Romoser, who covers the Supreme Court for the Journal, says that could lead to a loss of Democratic seats in some states. And the Pentagon gives its first precise estimate for how much the Iran war has cost the military so far: $25 billion. Alex Ossola hosts.
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