Michelle Fleury
New York business correspondent

Image source, EPA/Shutterstock

Kevin Warsh is a former Fed official and is widely seen as an institutionalist. The key question is how he would handle pressure from the White House.

At his confirmation hearing, Democratic Senator Elizabeth Warren warned he risked becoming a “sock puppet” for Donald Trump - a remark that captures the concern about political interference.

Recent history suggests it may not be so straightforward. Trump appointed current chair Jay Powell, but has since criticised him repeatedly over interest rate decisions, showing the limits of presidential sway.

The role itself comes with constraints. The Fed chair has a powerful platform, but only one vote on the Federal Open Market Committee (FOMC), where decisions depend on building consensus.

Those familiar with Warsh say he is more steady than radical on day-to-day policy. Even so, he has criticised the institution he may soon lead. That raises the prospect of both a president and a Fed chair taking aim at monetary policy - a dynamic that could further politicise the central bank.

Jerome Powell has finished his news conference after the US central bank announced it will not change the country's key lending rate for a third consecutive time.

These remarks are likely to be Powell's last in his role as Federal Reserve chairman, with Kevin Warsh set to takeover as chair in May.

Here are the main moments from Powell's press conference:

• Powell confirmed he will not be leaving the Fed's board of governors until the US Department of Justice's investigation into him is "well and truly over". He pledged to keep a "low-profile" while he remains on the board of governors.
• The independence of the Federal Reserve is "at risk", Powell said, adding that "the institution is being battered over these things" and "having to resort to the courts".
• The Federal Reserve's policy stance is "in a very good place for us to wait" on the outcome of the US and Israel's war with Iran and the closure of the Strait of Hormuz, however Powell noted "we just don't know yet and it's so unknown".
• The transition of power from Jerome Powell to Kevin Warsh will be " a very standard kind of transition process" as Powell said he had not seen Warsh since January at a dinner "where I congratulated him".

Jerome Powell has finished taking questions from the press.

Stand by and we'll bring you a recap of the key points.

Image source, Reuters

Speaking of the legal investigations the Federal Reserve has been under, Powell says "we've resisted" being involved in fiscal policy.

Asked if he thinks Fed independence is as strong as when he was first sworn in as chair, Powell says he has concerns.

"I think it's at risk.

"The institution is being battered over these things, we're having to resort to the courts.

"Successful advanced economy countries have a really strong set of protections around their central bank."

Powell continues in saying it would be best if the Federal Reserve could go back to focusing on the economy without interference.

"Do expect us to make decisions without political considerations and the very best analysis we can bring."

One reporter notes the high price of gasoline - over $4 (£2.97) per barrel - and asks Powell if Americans should expect to continue paying these prices for the rest of the year.

Powell says he can't make a predictions for gas prices, and that it partly depends on how long the closure of the Strait of Hormuz lasts.

Powell also notes that those higher petrol prices means less money for consumers to spend on other goods as well, and that this could affect US GDP.

Image source, Getty Images

Archie Mitchell
New York business reporter

A top economist says that despite today's decision by the Fed to hold rates steady, he still expects three interest rate cuts this year, at September, October and December’s meetings.

Samuel Tombs, chief US economist at Pantheon Macroeconomics, said rates will come down by 0.75 percentage points by the end of 2026.

It would take the central bank’s interest rate to between 2.75% and 3%.

But Tombs warned that "the risks that this timetable slips into next year have risen alongside the recent renewed rise in oil prices".

Powell was asked about market expectations that rates will remain flat until the end of the year, and said the bank's current rate is “well in the range of what I would consider reasonable".

Jerome Powell notes that the Federal Reserve's policy stance is "in a very good place for us to wait" on what the outcome will be from the US and Israel's war with Iran and the closure of the Strait of Hormuz.

"We can wait here and see how things work out before [we] react."

"We just don't know yet and it's so unknown, because how long will the Strait be closed? You can develop any number of scenarios that you want but we really won't know until we know."

Asked about his pledge to keep a "low-profile" as ex-chairman, while still remaining a governor on the panel, Powell begins with a physical joke, ducking down briefly behind the podium as if he's going into hiding.

The joke triggers laughs among the financial journalists in the room.

Answering seriously, he says that he would never serve as a shadow governor to his likely successor Kevin Warsh.

"I'm going back to being a governor. I respect the role of chair," he says, adding that he previously spent six years on the board in that role

"I plan to be a very constructive participant in that process," he adds, saying that this is largely due to his respect for the chairman.

Jerome Powell says the transition from himself to Kevin Warsh as chair of the Federal Reserve will be "a very standard kind of transition process".

Asked if Powell had been in touch with Warsh, Powell says he has not been in touch since January.

"I haven't seen him since seeing him at a dinner in January where I congratulated him."

"I don't know what a normal process is... I think this is and will be a very standard kind of transition process."

Image source, Getty Images

Powell says inflation has climbed recently, and is now at 3.2% in the US and is moving "a little bit in the wrong direction".

He says there's headline inflation coming out of the conflict in the Middle East, but that experts don't yet know what the final outcome of it will be.

"We're just going to need to see," he says.

Archie Mitchell
New York business reporter

Jerome Powell has said he does not take issue with politicians verbally criticising the actions of the Federal Reserve.

But the outgoing chair says legal actions by the Trump administration are “battering the institution and putting at risk the thing that really matters to the public".

"Which is the ability to conduct monetary policy without taking into consideration political factors," he says.

Powell says the administration's legal attacks on him "are unprecedented in our 113-year history, and there are ongoing threats of additional such actions".

Jerome Powell says he will not be leaving the Fed's board of governors until the US Department of Justice's investigation into him is "well and truly over".

US attorney for the District of Columbia Jeanine Pirro has confirmed the investigation would be closed but "noted however she would not hesitate to restart the investigation", Powell says.

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

Archie Mitchell
New York business reporter

Image source, Getty Images

Jerome Powell congratulates his likely successor, Kevin Warsh, on his advancement towards being confirmed as Federal Reserve chair by the Senate.

Warsh was voted through by Republicans on the Senate Banking Committee, and will now face a full vote in the Senate.

Powell describes the vote as "an important step" and says, "I wish him well as that process continues".

"The Fed's work is only as effective as the public's understanding of it," Powell continues.

He describes the institution is resilient, professional, and staffed by dedicated people.

He says that he "welcomes" the recent decision by federal prosecutors to drop its probe of the Fed, but adds that prosecutors said they "would not hesitate to restart the investigation".

"After my term as chair ends on 15 May, I will continue to serve as governor for a time to be determined," he says, adding that he intends to "keep a low profile" during that time.

To begin what is likely his final interest rate speech as Federal Reserve chair, Jerome Powell says the US economy is expanding but "inflation has moved up with growing global energy prices".

"Developments in the Middle East are contributing to high levels of uncertainty," he says.

But, Powell says "economic activity has been expanding at a solid pace", with consumer sentiment being "resilient".

Powell also notes that "inflation has moved up recently".

Jerome Powell has started delivering his remarks about the Fed holding interest steady. You can watch live above.

Image source, Reuters

Chair of the Federal Reserve Jerome Powell is expected to speak shortly after the Federal Reserve held US interest rates at the range of 3.5% to 3.75%.

This decision is expected to be Powell's last before his tenure is set to end.

You can click watch live above to follow Powell's speech.

Interest rate hold is no surprisepublished at 19:28 BST

19:28 BST

Samira Hussain
Reporting from New York

It comes as no surprise interest rates remain unchanged. Inflation is high and with the Strait of Hormuz still closed, energy prices will continue to push inflation even higher.

There has been little job growth in the last few months, so it seems like a natural move to keep rates as is.

But the big news is what comes next. That is where the Committee was very divided. The issue was the wording of the statement, and in particular on sentence, which to Fed watchers, implies there could be a rate cut at the next meeting if the data shows it is warranted. It's what's called an "easing bias".

Four committee members did not approve of that bias being in the statement. It looks like the next chair of the committee -expected to be Kevin Warsh - may find himself running more difficult FOMC meetings in the months to come.

Archie Mitchell
New York business reporter

In a statement alongside its decision, the Federal Reserve says the US-Israel war in Iran is "contributing to a high level of uncertainty about the economic outlook".

But, in a hint it is prepared to roll out cuts in the future, the statement also refers to an "easing bias", saying the body will look at economic data and how the outlook changes when it considers "additional adjustments" to the interest rate.

Four of the Federal Reserve's governors dissented against its ultimate decision for the first time since October 1992, in a sign of how the US-Israel war in Iran is splitting the central bank.

Stephen Miran, an ally of US President Donald Trump, wanted the bank to cut interest rates by 0.25 percentage points, the Fed said.

Three other governors opposed the Fed's statement about "easing bias", an indication put out by the bank that it is leaning towards cutting interest rates at its next meeting - taking place in June.