Jerome Powell chaired his last Federal Reserve rate decision, keeping borrowing costs unchanged while vowing to remain on the Board until legal challenges from the Trump administration are resolved.

Rates unchanged amid inflation and global strain

The Federal Reserve held its benchmark interest rate steady at 3.5–3.75 percent at the conclusion of Jerome Powell's final meeting as chair, the central bank said, citing persistent inflation concerns and global economic strain.

Powell will not leave the Board yet

Powell said he will not depart the Federal Reserve Board until legal challenges posed by the Trump administration are "well and truly over." The distinction matters: while Powell's term as chair ends with this meeting, board governors serve fixed 14-year terms, meaning he retains a seat and a vote on monetary policy even after stepping down from the top role.

At his post-decision news conference, Powell addressed the Fed's institutional independence, ongoing inflation dynamics, and the broader geopolitical backdrop including the US-Israel war with Iran.

Criminal probe dropped, successor advancing

The US Justice Department earlier this month dropped a criminal investigation into Powell, whom President Donald Trump had accused of improper cost overruns in the renovation of the Fed's Washington headquarters. The Justice Department said the decision was expected to clear the path for the confirmation of Powell's successor.

That successor, Kevin Warsh, cleared a Senate committee on a party-line vote, with the panel advancing his nomination to the full Senate. Warsh, Trump's pick for Fed chair, faced pointed questions during his confirmation hearing about his independence from the White House. He denied having made any deal with Trump on the direction of interest rates and backed what he called a "policy regime change" at the central bank. He also rejected characterisations of himself as a presidential proxy, saying he was no "sock puppet."