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

Episode Date: April 29, 2026

P.M. Edition for April 29. In an unusual move, Federal Reserve Chair Jerome Powell said today that he plans to stay on the Fed’s board after his term as chair ends next month. WSJ economics reporter Matt Grossman explains Powell’s reasoning, and what divisions within the central bank could mean for interest rates. Plus a Supreme Court decision today limits how states use voters’ race to draw voting districts. James Romoser, who covers the Supreme Court for the Journal, says that could lead to a loss of Democratic seats in some states. And the Pentagon gives its first precise estimate for how much the Iran war has cost the military so far: $25 billion. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Nearly home. Isn't home where we all want to be? Riba here for Realtor.com, the pro's number one most trusted app. A dream home isn't a dream home if it comes with a nightmare commute. That's why realter.com has real commute, so you can search by drive time. Download the realtor.com app today because you're nearly home. Make it real with realtor. Pro's number one most trusted app based on August 2025 proprietary survey.

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. 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. 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 Osloaf 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. I will not leave the board until this investigation is well and truly over with transparency and finality. And I stand by that. He said the independence of the central bank was at risk. 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. 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? 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. What sense do we have about the relationship between Powell and Trump's Fed Chair nominee Kevin Warsh? 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. Now, Matt, back to the meat and potatoes, the interest rates. Today's decision had dissents from four 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? 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 genuinely more in favor of considering a possible hike in the future. So what kind of signal does that give us as to what the Fed's next move might be up or down? 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. That was our economic reporter, Matt Grossman. Thanks, Matt. Thank you.

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 than a 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 SNP were a little change 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 after-hours 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. Some of the best lessons don't come from a classroom. They come from experience. On The Power of Advice, a new podcast series from Capital Group, you'll hear from CEOs, investors, and founders about how they built careers, took risks, and reinvented themselves.

If you're starting your own journey, this is the kind of advice you won't want to miss. Available wherever you get your podcast. published by Capital Client Group, Inc. In a legal development in the AI space, the families of seven victims of a mass shooting in Tumblr Ridge, British Columbia earlier this year, are suing Open AI. The families say Open AI 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 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 six to three 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. its racially discriminatory election rules. The longstanding 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. James says this ruling could mean states redo their maps to remove majority black or majority Hispanic districts. 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 20,000. 26 midterms. So how many seats will actually end up being flipped is really too early to say.

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 U.S. military operation has cost. Here's Jules Hurst, the acting Pentagon. controller testifying before the House Armed Services Committee today. So approximately at this day, we're spending about $25 billion on Operation Epic Fury. Most of that is ammunition.

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 $1.5 trillion 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 cancer. 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 Talley Arbell. I'm Alex Osala for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Access to affordable credit helps me pay my employees

that I don't really need it. Infliction is killing me. But who cares? Big retailers are making record profits. That's why we support the Durban Marshall Credit Card Bill. See, banks and credit unions help small business make payroll. This bill would cut the vital resources they need. While increasing megastore profits, they deserve it.

Don't they? Tell Congress, stop the Durban Marshall money grab for corporate megastores. Paid for it by the Electronic Payments Coalition.