Powell to remain on Fed board after chair term ends, blocking Trump pick

Powell said he plans to stay on the Federal Reserve board after his chair term ends in May, calling the legal actions brought by the Trump administration “unprecedented” and warning that they are “battering this institution and putting at risk the things that really matter to the public.” He made the remarks at a press conference after the Fed announced it would keep its benchmark interest rate unchanged, and he framed his stay as a response to what he said is a broader threat to the central bank’s independence from political pressure.

Powell’s stay would mark a break from recent practice: the report said it would be the first time a Fed chair remains on the board as a governor since 1948. The chair transition itself has already been set in motion. The Senate Banking Committee earlier approved Powell’s successor as chair, Trump appointee Kevin Warsh, on a party-line vote.

Under the plan described in the report, Powell would continue as a Fed governor, possibly until January 2028. That timing intersects with the fate of another Trump appointee on the board: the report said Warsh, if confirmed, would take a seat currently held by Stephen Miran, whose term ended in January.

Powell said he had been assured by the Justice Department that any appeal of subpoenas would not restart a probe unless the Fed’s inspector general finds evidence of criminal activity. The Fed chair returned to the theme of closure when asked about the status of those legal matters, saying he was “waiting for the investigation to be well and truly over with finality and transparency” and that he would leave when he thought it appropriate.

As the Fed simultaneously held the line on rates, the report described unusual disagreement among decision-makers about the outlook. The Fed left the policy rate unchanged for a third straight meeting but signaled it could still cut borrowing costs in coming months, drawing the most dissents since October 1992. Three officials dissented against removing the reference to a future cut, while a fourth, Miran, dissented in favor of an immediate rate cut.

The report said the dissents came from Beth Hammack, president of the Federal Reserve Bank of Cleveland; Neel Kashkari, president of the Minneapolis Fed; and Lorie Logan, president of the Dallas Fed. It also said the regional bank presidents have historically been more likely to dissent than the Washington-based governors, whose decisions more often align with the chair.

Powell addressed the connection between the chair transition and the policy path that the White House has pressed for. The report said Powell’s decision to stay could make it harder for Warsh to engineer rate cuts Trump has demanded, and it attributed that potential effect to economists who said it would take time for Warsh to build consensus. It also said Wall Street investors, based on futures pricing, did not expect a reduction until well into next year.

Trump responded late Wednesday to Powell’s decision on social media, using a nickname for the chair and saying he wanted to stay because he could not get a job elsewhere. Separately, Warsh has promised to pursue what the report described as “regime change” at the central bank and has said he wants to make sweeping changes, including to economic models, communications, and the balance sheet.

Powell, speaking about Warsh’s confirmation and whether he would withstand political pressure, answered that Warsh had “testified very strongly at his hearing” and that he took him at his word. Powell also disputed the idea that his plan to remain on the board would interfere with Fed operations, saying he was not looking to be “a high profile dissident.”

At the same time, Powell continued to press his core warning that the Fed’s independence remains “at risk,” and he said the central bank has “had to resort to the courts” to enforce its ability to make monetary policy without political considerations. The report described the Fed’s policy decision taking place amid a murky economic picture, with inflation elevated and the labor market showing uneven signals—factors that the report said help explain why the Fed held steady even as dissents reflected deeper divisions inside the rate-setting process.

Sources:

• Associated Press (Jerome Powell said he plans to remain on Fed board; Fed keeps benchmark rate unchanged; dissents and transition details; legal and independence remarks; Trump response; quotations and comments attributed to Powell, and cited economists and officials).