NEWS AND INSIGHTS | INSIGHTS

CIO Notebook: Powell Faces Down Dissent as Transition Looms Large

April 30, 2026
Shannon Saccocia, CFA, Chief Investment Officer—Wealth

We remain constructive on global equities and select fixed income, favoring U.S. large and small caps, emerging markets, and commodities, while viewing investment grade bonds as attractive given overstated expectations for tighter monetary policy.

As expected, the Federal Open Market Committee (“FOMC”) held the fed funds target rate steady at 3.50% to 3.75% following their June meeting. However, there were four dissents to the decision – the most since October 1992. The lone dissent for an interest rate cut came from Stephen Miran, who once again called for a 25-basis point cut, while Fed Reserve Bank Presidents Beth Hammack, Neel Kashkari, and Lorie Logan took issue with the easing bias within the statement, although they supported the rate decision. Changes in the statement were limited to an acknowledgment of the impact of the Middle East conflict on energy prices and economic uncertainty; the statement continued to point to the Fed’s dual mandate and the balance of risks in the current environment.

In addition to his comments on the economy and monetary policy in his opening remarks, Fed Chair Jerome Powell clarified what his intentions would be following the end of his term as Chair. He confirmed that he will stay on at the Fed, citing his concerns about the potential for renewal of the Department of Justice’s investigation of the Fed and his desire to do his part in maintaining the independence of the Fed as an institution. He also pledged to “keep a low profile,” reflecting on the difference between the role of Chair and that of a governor, a position in which he served previously.

During the press conference, Powell admitted that there was still more to come in terms of the impact of higher energy prices on the global economy – seemingly supporting the notion that there could be a shift from an easing bias to a neutral stance in the next meeting should energy prices remain elevated. However, he noted that the U.S. is in a more advantageous position today than it was during the 1970s oil crisis and is currently better off than other countries more reliant on Middle Eastern energy supply. He also admitted that the labor market is not currently a source of inflation, as the softness in the labor market is buffering the impact both of tariffs and energy prices over the last year – underpinning the decision to hold rate steady in the meeting. Powell additionally confirmed that his neutral rate has been in the 3-4% range.

Recognizing the risk of higher energy prices, we believe the Fed could still cut rates twice this year. We view the current oil/energy shock as transitory and agree with Powell that the difference in the labor market today versus 2022 likely prevents a repeat of that inflation regime. We remain constructive on global equities, seeing real opportunity in U.S. large caps and maintaining our conviction in U.S. small cap equities, emerging markets equities, and commodities. We also believe that expectations for a meaningful shift to tighter global monetary policy are likely overdone and we are seeing opportunities in investment grade fixed income as a result. We encourage investors to review their current allocations and to rebalance as appropriate despite the overhang of geopolitical uncertainty.

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