MNI Fed Preview - April 2026: Between War And Warsh

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EXECUTIVE SUMMARY

• April’s FOMC meeting communications will reiterate the Committee’s broadly shared view that policy is well-positioned and the next move is not urgent, particularly because the Iran war-related energy shock and associated uncertainty complicate the outlook.
• Data since the last FOMC meeting have largely supported a wait-and-see approach, on balance showing initial resilience to the energy price shock seen in March (especially in the labor market) although surveys warn higher spillover to non-energy prices could be in the pipeline.
• Where Committee views have started to diverge most is whether and how quickly the FOMC could signal openness to removing its explicit easing bias.
• So while a Fed funds rate hold at 3.50-3.75% at this meeting is universally expected, with no new set of economic projections, attention will be paid to whether the easing bias in the Statement guidance is amended in favor of a two-sided approach to future rate moves.
• Either way, rate guidance may soon be eliminated altogether. This is likely to be Chair Powell’s last meeting before his term ends in mid-May, after which Kevin Warsh is set to assume the chairmanship.
• In his Senate confirmation hearing, Warsh said he doesn’t believe in forward guidance, and signaled that he would seek major changes to not just Fed communications practices but several key areas of policy.
• Warsh is broadly expected by markets and analysts to steer the FOMC’s rate lean in a more dovish direction, but his ability and indeed willingness to do so are not entirely clear.
• There’s not much Powell can say at the press conference about the outlook that differs from what he said in mid-March, given the ongoing impact of the war distorting economic signals, though it’s possible that if the Statement doesn’t shift to a two-way rate guidance, he may echo the recent Minutes in a hawkish fashion in suggesting that the Committee is leaning increasingly to that conclusion.

MNI’s separate preview of sell-side analyst summaries to follow on Monday April 27