The Federal Reserve (Fed) is holding its third meeting of the year in the context of a balanced labor market. The March employment report, which indicated lower unemployment and a rebound in job creation, supports a wait-and-see stance, allowing the Fed to remain focused on its inflation target, particularly amid ongoing geopolitical uncertainty in the Middle East.
This meeting will most likely be the last chaired by Jerome Powell. The recent dropping of the Department of Justice investigation removes the main obstacle to his succession, although Jerome Powell has not yet specified whether he intends to retain his seat as a governor (through January 2028). The Senate Banking Committee is scheduled to vote on Kevin Warsh’s nomination as chair on April 29, the second day of the meeting.
Our expectations
- The Federal Open Market Committee (FOMC) is expected to maintain the target range at 3.50%–3.75%, with broad consensus. Monetary policy remains well positioned to address risks to the Fed’s dual mandate (inflation and employment).
- The statement is likely to introduce a more symmetrical bias: future decisions could move either downward or upward, depending on incoming data.
- On the technical side, the Fed has already announced a slowdown in the pace of its Treasury purchases under its Reserve Management Purchases program, reduced from $40 billion to $25 billion per month. These purchases were initiated at the end of 2025 to address a temporary decline in reserves linked to the tax calendar, which has now ended as of April 15.
Conclusion
The Fed is preserving its flexibility: easing remains possible if inflation declines or if the labor market weakens, without ruling out further tightening, which remains outside the central scenario.
Completed 27/04/2026. This commentary is provided for information purposes only. The opinions expressed by Crédit Mutuel Asset Management are based on current market conditions and are subject to change without notice. These opinions may differ from those of other investment professionals. Published by La Française Finance Services, head office located at 128 boulevard Raspail, 75006 Paris, France, a company regulated by the Autorité de Contrôle Prudentiel as an investment services provider, no. 18673 X, a subsidiary of La Française. Crédit Mutuel Asset Management: 128 Boulevard Raspail, 75006 Paris is an asset management company approved by the Autorité des marchés financiers under n° GP 97 138 and registered with ORIAS (www.orias.fr) under no. 25003045 since 11/04/2025. Public Limited Company (Société Anonyme) with share capital of €3,871,680, RCS Paris n° 388 555 021, Crédit Mutuel Asset Management is a subsidiary of Groupe La Française, the asset management holding company of Crédit Mutuel Alliance Fédérale.
