Federal Reserve Chair Jerome Powell will remain a governor at the central bank beyond his May 15 departure from the chair role, extending his hand in monetary policy decisions through January 2028 and blocking an immediate Trump administration opportunity to reshape the board.
Powell announced the decision Wednesday at what he called his final press conference as chair, framing the move as a defense against what he described as coordinated political attacks on the Fed's independence. The announcement immediately triggered pushback from the White House and Treasury Department, signaling a deepening clash over the institution's autonomy.
"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," Powell told reporters. "I worry that these attacks 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."
The Fed chair's decision reverses a long-standing modern practice. Since the mid-20th century, Fed chairs have typically stepped down from the Board of Governors when their leadership term concluded. The last exception came nearly eight decades ago under Marriner Eccles, whose chairmanship ended in 1948 but who remained a governor until 1951.
Trump responded swiftly on Truth Social, dismissing Powell's move as self-serving. "Jerome 'Too Late' Powell wants to stay at the Fed because he can't get a job anywhere else. Nobody wants him," the president wrote.
Treasury Secretary Scott Bessent chimed in on X, calling the decision a departure from tradition.
Powell's announcement came after months of uncertainty surrounding whether federal prosecutors had satisfied his preconditions for leaving the board. In January, the Fed disclosed that prosecutors had obtained grand jury subpoenas related to a multibillion-dollar headquarters renovation project. Investigators examined whether Powell had committed fraud and misled Congress about the construction.
Two judges separately ruled the probe appeared designed to pressure Powell into either cutting interest rates or resigning. When U.S. Attorney Jeanine Pirro announced last week that her office was closing the investigation as the Fed's watchdog took over, she added a crucial caveat: she retained the authority to restart the criminal investigation if warranted by new facts.
Powell said that recent developments regarding the investigation encouraged him, and he promised to monitor the remaining process steps carefully. "I've said that I will not leave the board until this investigation is well and truly over with transparency and finality. I stand by that," he stated.
The Fed chair signaled he plans to maintain a quiet presence once Kevin Warsh assumes the chair position. "There's only ever one chair of the Federal Reserve Board," Powell said. "I'm not looking to be a high-profile dissident or anything like that."
Author James Rodriguez: "Powell is betting that staying inside the institution matters more than appeasing Trump, and that's a gamble that will test just how independent the Fed can actually be in the months ahead."
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