Jerome Powell announced on Wednesday that he intends to stay on the U.S. Federal Reserve board even after his term as chair concludes next month. Powell expressed concerns about the unprecedented legal attacks from the Trump administration jeopardizing the central bank’s independence.
By choosing to continue as a Fed governor, Powell will break a long-standing tradition since 1948 of the Fed chair not serving on the board. This decision prevents President Trump from appointing his preferred candidate to the board. Powell may serve until January 2028, while Kevin Warsh, Trump’s nominee for chair, could replace a seat currently held by Stephen Miran.
Powell’s move is expected to complicate Warsh’s efforts to push for rate cuts, a strategy favored by Trump and economists. The U.S. Attorney for the District of Columbia recently ended a probe into the Fed’s renovations, with Powell awaiting the completion of the investigation before making further decisions.
The Federal Reserve decided to maintain its benchmark interest rate unchanged, signaling a possible future cut amidst dissent within the rate-setting committee. Trump responded to Powell’s decision critically, while Warsh, if approved, aims to bring significant changes to the central bank’s policies and operations.
Despite potential tensions with the Trump administration and concerns about the Fed’s independence, Powell emphasized the importance of making monetary policy decisions without political influence for the public’s benefit. The situation may lead to increased divisions among policymakers, but Powell reiterated his commitment to maintaining a low profile and avoiding interference in the board’s operations.
