Fed likely holds at 3.5%–3.75%

The Federal Reserve is expected to leave its benchmark interest rate at 3.5% to 3.75% on Wednesday, April 29. (federalreserve.gov) (cmegroup.com) The policy decision is due at 2:00 p.m. Eastern, followed by Chair Jerome Powell’s press conference at 2:30 p.m. on the Federal Reserve calendar. (federalreserve.gov) Markets have treated a hold as the base case for weeks. A CME Group market update on April 15 said FedWatch showed a 98.4% probability that the Fed would leave rates unchanged at the April 29 meeting. (cmegroup.com) The reason is not that inflation is beaten. The Bureau of Labor Statistics said the Consumer Price Index rose 0.9% in March and 3.3% from a year earlier, after a 21.2% monthly jump in gasoline. (bls.gov) The Fed’s own preferred inflation gauge is cooler than CPI, but still above target. The Bureau of Economic Analysis said the personal consumption expenditures price index was up 2.8% in February, versus the Fed’s 2% goal. (bea.gov) (federalreserve.gov) That leaves Powell balancing two messages at once: rates are already restrictive, but fresh energy-driven inflation can still delay cuts. Fed minutes from the March 17-18 meeting said the Middle East conflict pushed energy prices sharply higher and raised near-term inflation projections. (federalreserve.gov) Those minutes also showed how quickly market expectations shifted. Fed staff wrote that crude futures rose about 50% during the intermeeting period and that a rate cut was not fully priced in until December. (federalreserve.gov) By late April, spot oil prices were below the most alarmed forecasts but still elevated. Trading Economics showed crude oil at about $100.42 a barrel on April 29, up more than 72% from a year earlier. (tradingeconomics.com) The March minutes captured a split between Wall Street pricing and economist forecasts. Options markets pointed to no rate change this year, while the Fed’s Desk survey median still showed two quarter-point cuts in 2026. (federalreserve.gov) Wednesday’s statement is not scheduled to include new quarterly projections. That means the market focus will fall on Powell’s wording about inflation, energy prices, and whether June is still plausibly in play. (federalreserve.gov) If the Fed holds, the decision itself will be the least surprising part of the day. Powell’s clearest signal may be whether higher oil and March inflation changed the timetable from “later” to “not yet.” (federalreserve.gov) (bls.gov)