Fed holds rates at 3.5–3.75%; markets cut odds of 2026 rate cuts after Powell
- The Federal Reserve held its policy rate at 3.5% to 3.75% on April 29, but the bigger surprise was an 8-4 vote split. - Stephen Miran wanted a quarter-point cut, while Beth Hammack, Neel Kashkari, and Lorie Logan opposed keeping language that still leaned dovish. - Markets took that as a hawkish shift — and prediction markets now lean much harder toward zero or fewer 2026 cuts. (cnbc.com)
The Fed part was simple. Rates stayed at 3.5% to 3.75% on April 29. But the signal underneath it got a lot messier — and more important. What moved markets was not the hold itself. It was the split inside the Federal Open Market Committee, plus Jerome Powell’s message that the risks now run both ways, not just toward easier policy. (cnbc.com)e “no change” was already priced in. Polymarket had June “no change” around 95%, and Kalshi showed the same ballpark. So traders were not waiting for the headline. They were waiting for the tone — and the tone came off less cut-friendly than many had hoped. (polymarket.com) ### What was the real sur(cnbc.com)d 8-4, the most dissents at an FOMC meeting since 1992. One dissenter, Governor Stephen Miran, wanted a 25-basis-point cut. Three others — Cleveland Fed president Beth Hammack, Minneapolis Fed president Neel Kashkari, and Dallas Fed president Lorie Logan — were fine with holding rates, but did not want the statement to keep implying cuts were still the default next move. (cnbc.com) ### Why does that dissent matter so much? Because it shows the committee is no longer arguing only about when to cut. It is arguing about the whole direction of bias. That is a bigger shift. If several officials no longer want “easing bias” language in the statement, markets have to take seriously the idea that the Fed is closer to neutral — or even willing to stay restrictive longer. Powell basically nodded at that when he said “the center is moving toward a more neutral place.” (finance.yahoo.com) ### What is Powell worried about? Two things at once. Inflation is still sticky, and the labor market is softening enough that some officials want relief. Add higher oil prices and broader uncertainty tied to the Middle East, and the Fed has a genuine two-sided problem. Cut too soon, and inflation could re-accelerate. Wait too long, and growth or hiring could crack harder. That is why the meeting looked divided instead of decisive. (cnbc.com) ### How did markets reprice after that? Prediction markets shifted toward fewer cuts. On Polymarket, “0 cuts in 2026” was around 58%, and the most likely end-2026 policy rate was 3.75%, with 3.5% trailing. Kalshi showed a similar setup — 54% for exactly zero cuts in 2026, and only a slim edge for any cut before 2027. That is not a market expecting fast relief. It is a market saying the bar for cuts just got higher. (polymarket.com) ### Does Powell staying on the Board matter? Yes, a bit. Powell said he plans to remain a governor for some period after stepping down as chair, while Kevin Warsh moves toward confirmation. That does not change the April rate decision. But it does add another layer to how investors are reading the transition — especially when the committee is already split and the next chair may want a different style or message. (polymarket.com)april-2026.html)) ### What does this mean in real life? Basically, cheaper money probably is not arriving soon. If you were counting on lower borrowing costs for a home, refinance, equipment purchase, or business expansion later this year, the odds just got worse. Not impossible — just worse. The Fed did not shut the door on cuts. But Powell and the dissenters made clear that door is no longer swinging open on its own. (cnbc.com) ### Bottom line The April 29 meeting was a hold on paper and a hawkish repricing in practice. The number stayed put. The center of gravity did not. (cnbc.com)
