Powell's farewell without stepping down, rare internal disagreements, how will the future market move?

Shaw, Golden Finance

In the early morning of April 30, 2026, the last FOMC meeting of Powell’s tenure as Federal Reserve Chair concluded, with the Fed maintaining interest rates at 3.5%-3.75%, in line with market expectations. This is the third consecutive rate hold announced this year. At this meeting, the Fed described inflation as “still somewhat high,” rather than “slightly high” as in previous statements, citing global energy prices as the reason. The policy vote resulted in an 8-4 split, the most divided decision since 1992. Among the 12 FOMC voting members, Milan voted against, advocating a 25 basis point rate cut; Hamrick, Kashkari, and Logan also voted against, opposing language in the statement that leaned toward easing. Subsequently, Powell stated at his final press conference that he will remain on the Board after May 15 and that he will leave the Fed at an appropriate time.

After the Fed’s decision was announced, U.S. Treasuries, stocks, and gold declined. Before the statement, U.S. stocks, Treasuries, and gold fell intraday, while the dollar index rose. Following Powell’s press conference, spot gold dropped 1%. WTI crude oil rose about 8.2%, with Brent futures reaching their highest since June 2022. U.S. Treasuries were sold off, the dollar strengthened, and gold and cryptocurrencies retreated in tandem.

In Powell’s final FOMC meeting of his term, as expected, he continued to hold steady, but it revealed deeper divisions within the decision-making leadership. The inflation concerns triggered by the Iran situation and energy crisis remain unresolved. Can Powell and Kevin Wirth smoothly transfer power? How will the market interpret this decision, and what does the future hold?

1. Powell’s last decision remains on hold, market nearly no longer bets on rate cuts

Early this morning, Powell’s final FOMC meeting as Fed Chair concluded, with the benchmark rate maintained at 3.5%-3.75%, consistent with market expectations. This is the third rate hold announced this year, maintaining this level since the last cut in December 2025. In the statement, the Fed described inflation as “still somewhat high,” rather than “slightly high” as before, citing recent rises in global energy prices. The statement noted that, on average, employment growth remains subdued. The committee seeks to achieve maximum employment and 2% inflation over the long term. The development of the Middle East situation adds significant uncertainty to the economic outlook. The committee remains highly attentive to risks to its dual mandate (full employment and price stability).

Before the decision, market expectations for a rate cut before 2027 had significantly cooled. Kalshi’s prediction market pricing showed that the probability of a rate cut before 2027 is now only about 50%, down sharply from 80-90% earlier this year. After the decision, market pricing indicates a higher likelihood of rate hikes than cuts this year. According to The Wall Street Journal, after some hawkish signals from Fed officials, Wall Street traders are betting on a possible rate hike this year, though the chance remains small. CME interest rate futures data show traders believe there is an 11% chance of a rate hike this year, up from 5% earlier in the day and 0% on Tuesday, while the chance of a cut hovers around 2%. The latest CME “FedWatch” data show that the probability of the Fed holding rates steady through June is 98.6%, with a 1.4% chance of a 25 basis point cut. Through July, the probability of holding steady is 96.5%, with a 3.4% chance of a cut; through September, the probability is 96.1%, with a 3.8% chance of a cut. Market predictions on Polymarket show bets on whether the Fed will cut rates again in 2026. After the decision, the market’s expectation that the Fed will not cut rates this year has surged to 58%. The probability of three rate cuts within the year has sharply fallen to 6%.

Following the Fed statement, amid the largest internal split in decades, U.S. Treasuries, stocks, and gold declined. Before the statement, stocks, Treasuries, and gold fell intraday, while the dollar index rose. After Powell’s press conference, spot gold dropped 1%. WTI crude oil surged about 8.2%, with Brent futures reaching their highest since June 2022. The surge in oil prices, combined with hawkish signals from the Fed, led to Treasuries being sold off, the dollar strengthening, and gold and cryptocurrencies retreating together. Spot gold fell 1.15%, continuing its downward trend, with silver dropping 2.44%. U.S. stocks saw the Nasdaq rise slightly by 0.04%, the S&P 500 fall by 0.04%, and the Dow Jones drop by 0.57%. Cryptocurrency markets also came under pressure. Bitcoin experienced a V-shaped move, rising 1.8% at one point, then falling nearly 3% from the daily high, briefly dropping below $75k. Ethereum declined 2.4% intraday.

With Powell’s term ending in May, the last FOMC meeting, as expected, saw the Fed hold steady, but it revealed larger internal disagreements over policy paths and economic assessments. The unresolved energy crisis from Iran and ongoing inflation worries remain. Whether Powell and Wirth can smoothly transfer leadership, and the Fed’s independence amid ongoing conflicts with the Trump administration, add further uncertainty.

2. Largest internal split in 34 years at FOMC, amplifying uncertainty

The statement from this FOMC meeting showed little change from the March meeting in its outlook on the U.S. economy. The Fed described inflation as “still somewhat high,” rather than “slightly high,” partly due to recent rises in global energy prices. The statement noted that, on average, employment growth remains subdued. The committee seeks to achieve maximum employment and 2% inflation over the long term. The development of the Middle East situation adds significant uncertainty to the economic outlook. The committee remains highly attentive to risks to its dual mandate (full employment and price stability). The statement emphasized that recent indicators show economic activity expanding at a steady pace. Employment growth remains low on average, with unemployment rate nearly unchanged in recent months. When considering further adjustments to the federal funds rate, the committee will carefully evaluate the latest data, evolving economic outlook, and risk balance.

This voting result was 8-4, the highest number of dissenting votes since October 1992. Among the 12 FOMC members, Fed Governor Stephen I. Miran again voted against, advocating a 25 basis point cut; three regional Fed presidents also voted against—Cleveland’s Beth M. Hammack, Minneapolis’s Neel Kashkari, and Dallas’s Lorie K. Logan—though they supported holding rates steady, they opposed including language in the statement that leaned toward easing.

This meeting exposed larger internal disagreements over whether to continue cutting rates. With Powell’s term ending soon, whether Wirth can succeed smoothly and whether internal divisions can be eased remains uncertain.

3. Powell’s farewell but not departure, emphasizing independence

At the subsequent press conference, Powell, who will step down as Fed Chair on May 15, responded to questions about inflation data, rate paths, and recent political pressures on the Fed. He stated that the current policy stance is appropriate and conducive to achieving the Fed’s goals. Powell said the U.S. economy remains resilient, but employment growth is slow, and the unemployment rate has changed little. Consumer spending remains robust. He emphasized that the development of the Middle East situation introduces high uncertainty, and both sides of the dual mandate face risks. The Fed’s long-term inflation expectations remain aligned with the 2% target. Powell expressed full trust and congratulations to his successor, Kevin Wirth, calling it a “very normal, standard transition.” But he also announced that he will continue to serve as a Board member after May 15 and will leave the Fed at an appropriate time. He promised not to hinder the new Chair’s policies and to avoid being a “shadow chairman.”

In response to questions, Powell said the Fed’s independence is under threat and must respect the boundaries between the Fed and the Treasury. If the Fed makes politically charged decisions, market confidence will erode. Regarding inflation, Powell attributed it to energy conflicts and tariffs. He acknowledged that in the short term, this will push up overall inflation and could even harm GDP by reducing consumers’ disposable income, but before that, the Fed does not need to rush to change rates or forward guidance. Powell noted that the number of officials supporting a shift toward a neutral stance has increased, and the next meeting might consider changing the current easing bias. Rate guidance could change then. He also said that if rate hikes are needed, signals will be issued, but currently, no one is calling for hikes.

Powell’s farewell but not “leaving,” shocks the market; whether the Fed’s power can transfer smoothly, and whether conflicts with the Trump administration will continue, all add more uncertainty to the market.

4. How to interpret this Fed decision and Powell’s statements

Regarding this Fed decision and Powell’s comments, “The Fed’s mouthpiece,” Wall Street Journal reporter Nick Timiraos, said these disagreements highlight the complex situation Wirth faces as he prepares to succeed Powell. He must handle internal divisions over the rate path and new inflation risks from energy shocks. Over the past month, several policymakers have indicated that, amid rising energy costs from the Iran conflict and the possibility of continued increases, the pause in rate adjustments could be extended. Although most officials in the March meeting still expected a slight rate decline by year-end, current uncertainties are disrupting this outlook. More aggressive scenarios have also been proposed by some officials: if inflation pressures persist or intensify, rates might need to be raised again. This suggests that the Fed’s process of tightening with high rates to curb inflation, then gradually easing, might be delayed or adjusted.

U.S. Treasury Secretary Janet Yellen said that if Powell remains on the Fed Board, it would be unusual. For someone who emphasizes regulation, his unilateral decisions diverge from tradition. Kevin Wirth will bring a clear responsibility system, effective management, and prudent policymaking, injecting new momentum into the Fed.

CICC research report states that, from a fundamental perspective, the Fed should and needs to cut rates about twice, which is one reason we are more optimistic about rate cuts than the market. As long as oil prices do not stay above $100 until year-end, the high base effect will help inflation fall, providing room for rate cuts. But in practice, oil prices and Trump’s cooperation are crucial. The ongoing Iran situation keeps oil prices high, and Powell’s reluctance to investigate further has caused division within the Fed. The key is Trump; if a quick compromise is reached and investigations end, rate cut prospects will gradually open.

JP Powers, CIO of Rwa Wealth Partners, said: “This is the first time in over 30 years that so many dissenters have appeared; it’s a crazy time. Milan is somewhat independent, wanting to cut rates further now. I believe that with oil prices above $100, it’s very difficult for the committee to reach consensus. Also, with Powell’s transition, pushing such measures is quite difficult. Interestingly, the other three members even refused to include a leaning toward easing in the statement, which is probably the main point here.”

Analyst Anstey pointed out that we seem to be entering a new territory, requiring more time to understand the current situation. The only dissenting opinion on rate policy is Milan, who wants a 0.25% cut. The other three—Hammack, Kashkari, and Logan—think holding rates steady today is appropriate. Interestingly, these three dissenters interpret the language as leaning toward easing, because, literally, it’s neutral: the committee will adjust its stance as needed based on actual conditions to avoid risks that could hinder its goals. The “goals” are, of course, price stability and full employment. But I think these three see this language mainly as related to employment.

Analyst Anna and Stuart noted that the decision to hold rates steady was expected, but the dissenting votes were notable. Ironically, Powell—likely his last meeting as Fed Chair—led the dissenting votes, the most in recent history. The statement also raised inflation from “somewhat elevated” to “high.” Coupled with internal divisions, this underscores the challenge Wirth faces in achieving the rate cuts Trump desires. Unless there is a major deterioration in the labor market, it’s hard to imagine this divided committee acting quickly to cut rates.

Economist Thomas Ryan of Capital Economics said Powell’s decision to stay on as Fed Chair “overshadowed” the rate decision—this move will also force Trump ally Milan, who has supported rate cuts, to leave the Board, with Wirth expected to succeed Milan.

Laura Cooper of Nuveen stated that the Fed’s patience this week is prudent, and its policy stance is well-positioned. She noted that March data showed resilience—from robust employment to controlled inflation and optimistic retail sales—indicating U.S. consumers can absorb energy shocks. Cooper said, “Financial conditions remain favorable, so the Fed’s data-dependent stance may stay unchanged.”

5. Market outlook

The final decision of Powell’s term has been announced. How will major asset markets, including cryptocurrencies, move in the future? Let’s look at some key analyses.

1. Hong Kong Monetary Authority responded to the Fed’s decision, saying that maintaining rates aligns with market expectations. The market generally sees significant uncertainty about the future direction of U.S. monetary policy, depending on inflation trends and employment conditions, especially with ongoing tensions in the Middle East keeping oil prices high, which still needs to be observed for its impact on U.S. inflation. In Hong Kong, the monetary and financial markets remain orderly. HKD interest rates under the linked exchange rate system tend to follow U.S. rates, while short-term rates are influenced by local market liquidity, seasonal factors, and capital market activities. The future rate path in the U.S. remains uncertain and will impact Hong Kong’s interest rate environment. Citizens should consider and manage interest rate risks when making property, investment, or borrowing decisions. The HKMA will continue to monitor market changes and maintain monetary and financial stability.

2. Adrian Fritz, Chief Investment Officer at 21Shares, said that spot Bitcoin ETF continues to attract inflows, reinforcing Bitcoin’s core position in institutional asset allocation, even as prices hover below $80k. Fritz noted that since the start of the year, Bitcoin ETFs have absorbed nearly $2 billion, from retail, institutional, and hedge fund arbitrage and options trading. As traditional asset managers like Morgan Stanley accelerate their crypto strategies, digital assets are increasingly included in multi-asset portfolios. Bitcoin’s daily trading volume now exceeds $50 billion, with liquidity approaching that of large tech stocks like Nvidia. ETF mechanisms provide both primary and secondary market liquidity, gradually giving it “institutional-grade asset” status. Despite macro and rate pressures, Fritz believes ETF inflows have shifted from speculative to structural demand, and with geopolitical improvements, ongoing inflows, and short covering, Bitcoin could challenge $100k within the year. Meanwhile, altcoins are diverging more, and the market is shifting toward assets with stronger fundamentals and cash flow.

3. Coinbase and Glassnode’s latest global investor survey shows over 70% of crypto investors believe Bitcoin is undervalued, with 82% of institutional and 70% of non-institutional investors seeing the market as in “late bear market” or “value retracement” stages. Additionally, the proportion of realized market cap held by short-term holders (1 week to 1 month) has fallen to 3.91%, close to the level when Bitcoin was around $27k in October 2023. Analysts interpret this as a sign of declining speculative activity and that Bitcoin may be entering a “value accumulation zone.”

4. Billionaire hedge fund manager Paul Tudor Jones called Bitcoin the “best inflation hedge” and warned that stock valuations are excessively high.

5. Trump’s son Eric Trump predicts Bitcoin will reach $1 million. “It’s uncertain whether it will be in 2030 or 2031, but I fully believe it can hit that level. I’ve never been so optimistic about this asset in my life.”