Fed Holds Rates Steady and Ends the Powell Era Deeply Divided

Summary

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WSJ What’s News PM: "Fed Holds Rates Steady and Ends the Powell Era Deeply Divided"

Date: April 29, 2026
Host: Alex Osola
Main Theme:
This episode covers a landmark Federal Reserve meeting marking the end of Jerome Powell’s divisive chairmanship, a pivotal Supreme Court decision affecting the Voting Rights Act, and major updates on the costs of the ongoing Iran war. Additional business headlines and a surprising health study round out the episode.

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The Federal Reserve: Jerome Powell’s Final Meeting

Segment Start: 00:32

Main Points:

• The Federal Reserve kept interest rates steady, as expected.
• Jerome Powell chaired his last Fed meeting. He's expected to be succeeded by Kevin Warsh, former Trump economic adviser.
• Powell will stay on as a Fed governor until an ongoing Justice Department investigation is resolved.

Notable Quotes:

• Jerome Powell [01:47]:
  “I will not leave the board until this investigation is well and truly over with transparency and, and I stand by that.”
• Jerome Powell [01:58]:
  “My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors.”

Context & Analysis:

• Fed Independence in Question:
  Powell’s decision to remain as governor is highly unusual. As economics reporter Matt Grossman notes,
  “It’s more than 75 years since we’ve had a Fed chair who stayed around after his term as chair ends. It really speaks to the level of concern that Powell has about the Fed’s independence.” [02:14]
• Transition to Kevin Warsh:
  Warsh’s nomination advanced in the Senate; he’s expected to take over by the next Fed meeting in mid-June. Powell says he’ll stay out of Warsh’s way:
  “It’s important that the Fed only has one chair at any given time.” [03:13 - paraphrased]
• Deep Internal Division:
  At this meeting, four of twelve Fed board members dissented—the most at any Fed policy meeting since 1992.
  • Breakdown: One dissent was for a rate cut; three were against even hinting at a cut, preferring further hikes or at least continued caution.
  • Matt Grossman [03:49]:
    “There’s a strong signal...that if Kevin Warsh comes in with a strong preference to cut rates, he might face considerable opposition from some of the officials who’ve been in place on the committee for quite a while.”

Market Reactions:

• After the meeting, traders shifted bets toward rate hikes rather than cuts this year.
• The Dow slipped, bond yields rose, and energy prices touched wartime highs.
• Powell warned inflation is likely to rise in coming months.

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Supreme Court Narrows the Voting Rights Act

Segment Start: 00:32 & 07:52

Main Points:

• The Supreme Court, in a 6–3 decision along ideological lines, limited how states must consider race in drawing voting districts, weakening the Voting Rights Act.
• States are now permitted to dilute minority voting power by redrawing districts to disperse minority voters.

Notable Quotes:

• James Ramoser, Supreme Court reporter [00:40]: “Essentially, what they can do as a result of this ruling is eliminate districts that have a majority of black voters and then disperse those black voters into other districts that would be dominated by white voters.”
• James Ramoser [07:52]: “The longstanding interpretation of the Voting Rights act has been that it prevents what’s known as vote dilution... And what the Supreme Court did is it said that using the Voting Rights act in a way that is meant to protect minority voting power is itself unconstitutional...”

Impact:

• States may quickly redraw voting maps—but logistical and timing realities could delay changes until after the 2026 midterms.
  • James Ramoser [08:52]:
    “States will be able to split the minority voters in those districts into other districts and essentially flip some of those seats from safe Democratic to seats that may lean Republican...how many seats will actually end up being flipped is really too early to say.”
• Florida’s Redistricting may provide the GOP with up to four more seats in the House in upcoming elections. [09:27]

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The Cost of the Iran War: Pentagon’s First Precise Figure

Segment Start: 00:56 & 09:54

Main Points:

• The Pentagon gives its first official cost estimate for the two-month-old war with Iran: $25 billion.
• Most spending so far is for munitions, plus operational costs for planes and ships.
• The cost is expected to continue growing. The Pentagon has sent Congress a $1.5 trillion defense budget request for FY2027 (not including continued operations in Iran).

Notable Quotes:

• Jules Hurst, Acting Pentagon Controller [09:54]: “So approximately this day we’re spending about $25 billion on Operation EPIC Fury. Most of that is ammunitions. There’s part of that.”

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Business and Markets Roundup

Segment Start: 04:19

Key Stories:

• Major Tech Earnings:
  Meta posted its biggest quarterly revenue jump—$56 billion, up 33%—but shares dropped 5% as the company announced major new AI data center spending.
  Other major tech companies (Google, Amazon, Microsoft) also released earnings.
• Pershing Square Holdings IPO:
  Bill Ackman’s hedge fund went public. The fund’s shares closed down 18%, despite company shares ending slightly positive.
• Global M&A:
  Finland’s Kone to acquire Germany’s TK Elevator for $24 billion, forming the world’s largest elevator company with 100,000+ employees.

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Tech & Legal Update: OpenAI Sued Over Shooting

Segment Start: 06:52

• Families of seven mass shooting victims in British Columbia are suing OpenAI, alleging negligence after the shooter discussed gun violence scenarios with ChatGPT before the act.
• OpenAI’s response: It has improved safety protocols and would now report such activity to authorities.
• News Corp (owner of WSJ) maintains a content licensing deal with OpenAI.

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Health Highlight: Marriage and Cancer Risk

Segment Start: 10:15

• New study: Cancer rates 68% higher among men who've never married vs. those who have; for women, never-married individuals are 83% more likely to develop cancer.
• Explanation: Married people reportedly have better support systems, healthier behaviors, and are more likely to adhere to treatment.

Alex Osola [11:19]:
“If you’re sick of nagging your spouse about drinking too much or not exercising enough, take some solace in knowing that you could really be helping them stay healthy.”

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Memorable Moments & Quotes

• On Fed Independence [01:58, Jerome Powell]:

  “My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors.”

• On Deep Internal Division [03:49, Matt Grossman]:

  “There’s a strong signal today...that if Kevin Warsh comes in with a strong preference to cut rates, he might face considerable opposition from some of the officials who’ve been in place on the committee for quite a while.”

• On Supreme Court Ruling [07:52, James Ramoser]:

  “The Supreme Court...said that using the Voting Rights act in a way that is meant to protect minority voting power is itself unconstitutional...”

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Timestamps for Key Segments

• Fed Decision & Powell’s Last Meeting: 00:32–04:18
• Market & Earnings Recap: 04:19–06:04
• OpenAI Lawsuit: 06:52–07:52
• Supreme Court Voting Rights Decision: 07:52–09:27
• Florida Redistricting: 09:27–09:54
• Iran War Costs: 09:54–10:15
• Marriage & Cancer Study: 10:15–11:40

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Useful For:

• Anyone interested in the current economic, political, and legal landscape, particularly the Federal Reserve’s future, voting rights law, and U.S. military spending.
• Listeners seeking concise market news and surprising health insights.

Tone & Language:
Informative, analytical, authoritative, and brisk—mirroring the WSJ’s journalistic style.

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Transcript

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[Alex Osola]

There's a deep divide at the Fed as the Jerome Powell era comes to a close, plus a Supreme Court decision that weakens the Voting Rights Act.

[James Ramoser]

Essentially, what they can do as a result of this ruling is eliminate districts that have a majority of black voters and then disperse those black voters into other districts that would be dominated by white voters.

[Alex Osola]

And the Pentagon gives its first precise number for the military cost of the Iran war so far, $25 billion. It's Wednesday, April 29th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world today. Let's begin with the latest. At the Federal Reserve, the central bank held interest rates steady today. That part was widely expected, but not everything in today's announcement was so predictable. Journal economics reporter Matt Grossman is here now to discuss. Matt, let's start with Fed chair Jerome Powell. This was his last meeting as Fed chair, likely to be succeeded by Trump's pick, Kevin Warsh. Powell said he'll stick around as governor for a period that has yet to be decided. He said the Justice Department's investigation into him makes that necessary.

[Jerome Powell]

I will not leave the board until this investigation is well and truly over with transparency and, and I stand by that.

[Alex Osola]

He said the independence of the central bank was at risk.

[Jerome Powell]

My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors.

[Alex Osola]

How typical is it for a former chair to stick around on the board like this? And what could that mean for the board dynamics?

[Matt Grossman]

This is a really unusual move for Powell. It's more than 75 years since we've had a Fed chair who stayed around after his term as chair ends. It really speaks to the level of concern that Powell has about the Fed's independence. He did not want to leave while there was any hint of a legal threat. Given this Justice Department investigation that was hanging over him and the Fed over the past few months.

[Alex Osola]

What sense do we have about the relationship between Powell and Trump's Fed chair nominee, Kevin Warsh?

[Matt Grossman]

Powell said in his press conference today that he expects a normal transition to Kevin Warsh. Kevin Warsh's nomination was advanced today by the Senate Banking Committee. So now he goes to a full vote in the Senate and he's widely expected to be confirmed, which would likely make the next Fed meeting in mid June his first on the job. Powell said that he's going to stay around but keep a low profile. He said that the Fed will be Kevin Warsh's to lead and that it's important that the Fed only has one share at any given time.

[Alex Osola]

Now, Matt, back to the meat and potatoes. The interest rates. Today's decision had dissents from 4 out of 12 members and that's the most out of policy meeting since 1992. Which way were they dissenting? Did the dissenters want a hike or a cut?

[Matt Grossman]

So we had one dissent in favor of a rate cut and three dissents against the Fed hinting that its next move would be a cut. In other words, officials who are generally more in favor of considering a possible hike in the future.

[Alex Osola]

So what kind of signal does that give us as to what the Fed's next move might be up or down?

[Matt Grossman]

There's a strong signal today in those three dissents that if Kevin Warsh comes in with a strong preference to cut rates, he might face considerable opposition from some of the officials who've been in place on the committee for quite a while. Not only did the committee not vote for a cut today, but there were those three dissents from officials who didn't even want to talk about that possibility in the near future.

[Alex Osola]

That was our economic reporter, Matt Grossman. Thanks, Matt.

[Matt Grossman]

Thank you.

[Alex Osola]

Traders are changing their interest rate bets after some hawkish signals from today's Fed meeting. Traders now see a rate hike as more likely. Rate cut for this year. The Dow slipped, bond yields rose and energy prices touched wartime highs. After Powell took the podium for the last time as Fed chair, he warned that inflation would likely rise in the months to come. Meanwhile, the Nasdaq and the S and P were a little changed today. Also making waves in markets today was hedge fund manager Bill Ackman, who took his company Pershing Square and a stock picking fund public today. Shares in the fund closed down 18%. The company itself opened trading at $24 a share and closed 20 cents higher today. A flurry of tech earnings came in after the bell from Meta, Google, Amazon and Microsoft, to mention just one. Meta posted its biggest quarterly revenue jump in recent history. Sales grew 33% in the first quarter to more than $56 billion. But the company said it would spend even more money to build out AI data centers this year than it had previously expected. Meta stock was down more than 5% in trading. To read more on the big tech earnings, visit WSJ.com in M&A news Finland's Kone has agreed to buy German rival TK Elevator for almost $24 billion. The combined business will have more than 100,000 employees, and its annual sales would top 20 billion euros, making it the world's biggest elevator company. Coming up, what your marital status says about your likelihood of developing cancer. That's after the break.

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[Alex Osola]

Development in the AI space the families of seven victims of a mass shooting in Tumblr Ridge, British Columbia, earlier this year are suing OpenAI. The families say OpenAI was negligent. Months before the shooting, the suspect described scenarios involving gun violence on ChatGPT. OpenAI didn't report that to the police. OpenAI says it's improved how it assesses potential threats of violence and says that it would be in touch with law enforcement if such activity were discovered to Today News Corp. Owner of the Wall Street Journal, has a content licensing partnership with OpenAI. The Supreme Court today put new limits on how states draw voting districts. The court ended some protections for voters who are minorities. It was a 6 to 3 decision that fell along the Court's ideological lines. James Ramoser covers the Supreme Court for the Journal, and he says the decision dramatically narrows the Voting Rights act, the landmark 1965 law that prohibits racially discriminatory election rules.

[James Ramoser]

The long standing interpretation of the Voting Rights act has been that it prevents what's known as vote dilution. Vote dilution is reducing the power of minority communities to elect their preferred candidates, which in many cases are minority candidates. In practice, what that has meant is that when there are a sufficient number of minority voters in a state, the state is essentially forced to draw some voting districts that contain a majority of minority voters, majority of black voters, usually sometimes a majority of Hispanic or Asian voters. And what the Supreme Court did is it said that using the Voting Rights act in a way that is meant to protect minority voting power is itself unconstitutional and that compliance with the Voting Rights act is not an adequate justification for race conscious redistricting.

[Alex Osola]

James says this ruling could mean states redo their maps to remove majority black or majority Hispanic districts.

[James Ramoser]

States will be able to split the minority voters in those districts into other districts and essentially flip some of those seats from safe Democratic to seats that may lean Republican. I should say, though, that the immediate impact is still something we're sorting out. It may not be possible for some of these states to quickly redraw their maps in time to set in place districts for 2026 midterms. So how many seats will actually end up being flipped is really too early to say.

[Alex Osola]

Separately, Florida's Republican controlled legislature approved a redrawn map of its congressional districts today. The change could give the GOP up to four more seats in the House in November's midterms. It's been about two months since the war with Iran began, and we now have an estimate for how much the US Military operation has cost. Here's Jules Hurst, the acting Pentagon controller, testifying before the House Armed Services Committee today.

[Jules Hurst]

So approximately this day we're spending about $25 billion on Operation EPIC Fury. Most of that is ammunitions. There's part of that.

[Alex Osola]

Hearst said. That cost also included the bill for operating planes and ships. The cost is likely to grow as operations in the Middle east continue. The Pentagon has already sent Congress a one and a half trillion dollar budget request for fiscal 2027 that starts in October. But that number doesn't include the cost of continuing operations in Iran. At today's hearing, Hearst said the Pentagon would send an official spending request on the war to lawmakers once the Defense Department knows the full cost of the conflict. And finally, one of the benefits of marriage may be a lower risk of developing. A new study found that cancer rates were about 68% higher among men who have never gotten married compared with men who have gotten married. The relationship was even more pronounced for women. For those of us who haven't ever been married, cancer rates are 83% higher. So what's behind the link? One of the study authors said that married people tend to have better support systems and they're more likely to stick with treatment. They also have healthier behaviors overall. They drink and smoke less for example. And those are risk factors for cancer. So if you're sick of nagging your spouse about drinking too much or not exercising enough, take some solace in knowing that you could really be helping them stay healthy. And that's what's news for this Wednesday afternoon. Today's show is produced by Anthony Bansy and Danny Lewis with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

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