Fed on Hold: Powell Navigates "Higher for Longer" Path Amid Geopolitical Turmoil

Today, April 29, 2026, the Federal Open Market Committee (FOMC) will end its two-day policy meeting with a unanimous market expectation that interest rates will stay unchanged at 3.50%–3.75%. As the Federal Reserve battles a difficult economic backdrop, this decision prolongs a halt that has been in effect since December 2025. Although the labor market is cooling, inflation remains stubbornly high at 3.3%, and rising tensions in the Middle East have driven Brent crude prices soaring, posing significant upside risks to energy costs and general price stability.

Investors are intensely focused on the revised Summary of Economic Projections (SEP) and any possible changes in the "dot plot". The current consensus points to a hawkish change, with officials probably lowering their 2026 predictions from two rate reductions to zero or one. Although GDP growth is projected to be revised up to roughly 2.4%, the core Personal Consumption Expenditures (PCE) estimate is similarly trending upward at 2.7%. This change supports the "higher for longer" story since ongoing wage growth and geopolitical instability make the path to the Federal Reserve's 2% goal progressively "uncertain".

Given Chair Jerome Powell's approaching resignation and the continuing nomination hearings for Kevin Warsh, the press conference at 2:00 PM ET has extra weight today. Powell is anticipated to highlight a strictly "data-dependent" attitude, therefore weighing a weakening job market against the inflationary risks of fresh tariffs and international conflict. As traders recalculate the chances of any easing before year-end, a hawkish slant in his comments might cause the US Dollar (USD) to rise while putting downward pressure on equities and the cryptocurrency market.