(NEW YORK) — The Federal Reserve on Wednesday will issue its latest announcement on interest rates as gasoline prices in the U.S. reach their highest level in four years. The move marks what may be the central bank’s final decision on borrowing costs under the leadership of Fed Chair Jerome Powell.

The policy announcement is set to arrive at an uneasy moment for the central bank. The Iran war set off a rapid acceleration of price increases, posing a challenge for policymakers bedeviled by elevated inflation and sluggish hiring.

Investors overwhelmingly expect the Fed to leave rates unchanged on Wednesday, according to the CME FedWatch Tool, a measure of market sentiment.

A standoff between the White House and Congress, meanwhile, has cast doubt over succession plans for Powell as his term comes to a close next month.

President Donald Trump’s nominee to lead the Fed, Kevin Warsh, has faced a bipartisan stonewall in the Senate Banking Committee over a federal criminal investigation into Powell.

The Department of Justice moved to drop the probe last week, paving the way for Warsh to advance in a committee vote. If his nomination advances, Warsh would face a confirmation vote on the Senate floor.

The investigation into Powell focuses on alleged false testimony to Congress about an office renovation. Powell, who was appointed by Trump in 2017, has rebuked the probe as a politically motivated effort to influence interest-rate policy.

Powell’s term as Fed chair ends on May 15, but he said last month he would stay in the position until Warsh is confirmed.

Even after his successor is confirmed, Powell could remain on the Fed’s 12-member policymaking board until 2028, retaining a role in the central bank’s interest-rate policy. Powell has not indicated whether he intends to remain on the board.

Elevated price increases have coincided with a slowdown of economic growth, threatening to intensify an economic double-whammy known as “stagflation,” which poses difficulty for the Fed.

If the Fed opts to lower borrowing costs, it could spur growth but risk higher inflation. On the other hand, the choice to raise interest rates may slow price increases but raises the likelihood of a cooldown in economic performance.

The Fed held interest rates steady last month at its first meeting since the U.S.-Israeli war with Iran drove up gasoline prices and risked a wider bout of inflation.

The central bank’s move marked the second consecutive time it has opted to maintain interest rates at current levels since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.

Warsh, a former Fed official, is currently a fellow at a conservative think tank called the Hoover Institution, which is based at Stanford University.

During his term as a Fed governor in the late 2000s and early 2010s, Warsh gained a reputation as an interest-rate “hawk,” meaning he generally preferred higher interest rates as a means of ensuring low and stable inflation.

In recent months, however, Warsh has voiced support for lower interest rates, rebuking the Fed’s concern about inflation risk posed by a flurry of new tariffs issued last year.

Markets peg a roughly 80% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.

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