Federal Reserve chair Jerome Powell said on Wednesday that he will remain a central bank governor "for a period of time to be determined," citing attempted political interference.
Why it matters: It extends Powell's influence over monetary policy beyond the conclusion of his term as Fed chair on May 15. His term as one of seven Fed governors extends through January 2028.
- It denies President Trump the immediate opportunity to fill a vacancy on the influential Fed board.
- Powell's term as chair ends on May 15, but his term as a governor goes through Jan. 31, 2028.
What they're saying: "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 at a press conference on Wednesday, his last as Fed chair.
- "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," Powell added.
Trump responded to Powell's announcement in a Truth Social post Wednesday evening, saying: "Jerome 'Too Late' Powell wants to stay at the Fed because he can't get a job anywhere else — Nobody wants him."
- Treasury Secretary Scott Bessent wrote on X that Powell's decision "flies in the face of tradition."
Between the lines: Powell told reporters that he worries that the Fed's political independence is "at risk."
- "I think I am confident ... that the Fed will continue to make its decision based on rigorous analysis and not on political considerations, but we've had to fight for it," Powell said.
- "I like to think we can get out of that era and go back to respecting what the law says and what custom has been, which is to let the Fed do our thing," he added.
Zoom in: Fed chairs in the modern era have stepped down from the Board of Governors once their term as chair expires.
- The last time the Fed had this unusual governance dynamic was under Marriner Eccles, whose time as chair ended in 1948 but who remained a governor until 1951.
- Powell said that he planned to keep a "low profile" as a Fed governor. "There's only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair," he said.
- "I'm not looking to be a high-profile dissident or anything like that," Powell said later in the press conference.
The big picture: Until Wednesday, it was unclear whether the Department of Justice had satisfied Powell's conditions to leave as Fed governor.
- "I have no intention of leaving the board until the investigation is well and truly over, with transparency and finality," Powell told reporters last month.
- Last week, the U.S. attorney for the District of Columbia, Jeanine Pirro, posted on X that she had "directed her office to close our investigation" as the Fed's watchdog took over.
- But crucially, Pirro added: "Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so."
- "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. I'm encouraged by recent developments, and I'm watching the remaining steps in this process carefully," Powell said on Wednesday.
Zoom out: In January, Powell disclosed that the Fed had received grand jury subpoenas pertaining to the central bank's multibillion-dollar project to renovate its headquarters.
- The government was probing whether Powell had committed fraud and lied to Congress about those renovations.
- Twice a judge ruled to quash the subpoenas, saying the probe was aimed at pressuring Powell into bowing to Trump on interest rate cuts or resigning.
Editor's note: This story has been updated with additional details.
