Jerome Powell, chair of the Federal Reserve (Fed), announced on 29/4 that he intends to remain on the Fed's board of governors after his term as chair ends on 15/5. Speaking at a press conference following the Fed's policy meeting, Powell clarified his decision to stay.
"After my term as chair ends on 15/5, I will remain a governor for some additional time", Powell stated. He expressed a desire to avoid being "a high-level opposition figure or any such role", indicating his intention to stay until legal risks to the Fed "subside", allowing the institution to focus more on its core mission.
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Jerome Powell leaves his final press conference as Fed chair on 29/4/2026. Photo: Reuters |
Jerome Powell leaves his final press conference as Fed chair on 29/4/2026. Photo: Reuters
Powell's term on the board of governors extends until 2028. This body, comprising 7 members, is the Fed's highest governing authority, responsible for setting monetary policy, overseeing banks, and ensuring national financial stability. Typically, Fed chairs depart the board upon the conclusion of their leadership term. However, Powell had previously emphasized that the termination of a criminal investigation against him was a necessary condition for his departure.
On 29/4, Powell reiterated concerns that legal challenges from the administration of US President Donald Trump "are threatening the Fed's ability to make independent monetary policy decisions". A part of these challenges was resolved last week when the US Department of Justice dropped its criminal investigation into Powell.
However, despite the Department of Justice "assuring" the investigation had ended, federal prosecutor for the capital region Jeanine Pirro declared she "would not hesitate to restart it". "I am closely monitoring further developments", Powell said.
By remaining on the Fed's board of governors, Powell can join other officials in resisting pressure from the administration. Joseph Brusuelas, chief economist at the consulting firm RSM US, commented that this move "strengthens the central bank's ability to operate independently during a period of economic populism".
Thomas Ryan, an economist at Capital Economics, believes Powell's continued presence could significantly impact monetary policy. He noted that if governor Stephen Miran, nominated by Trump last year and a consistent supporter of interest rate cuts, were to depart, Powell's influence would be substantial. "Powell will shift the Federal Open Market Committee's (FOMC) stance towards a tighter policy, complicating the task of the next Fed chair if they wish to lower interest rates in the short term", Ryan stated.
The announcement comes as Kevin Warsh, nominated by US President Donald Trump to be the next Fed chair, was approved by the US Senate Banking Committee on 29/4. His confirmation now moves to the US Senate, with senators expected to vote as early as 2 weeks from now.
US Treasury Secretary Scott Bessent criticized Powell's decision on Fox Business. Bessent argued that it "violates Fed practices" and is an "insult" to Warsh and other officials, "by suggesting that other Republican candidates do not care about the Fed's institution, and only Powell can maintain the agency's integrity".
Beyond these issues, the Fed faces other unresolved legal complications. These include Trump's attempt to dismiss governor Lisa Cook, a case currently under review by the US Supreme Court. Additionally, the results of the Fed's inspector general's investigation into the headquarters renovation project are pending. Senator Tim Scott, chair of the US Senate Banking Committee, has requested the agency to provide the results within 3 months.
Powell emphasized that the Fed continues to face significant legal pressures. "To date, we have been successful in defending the Fed", he stated, but affirmed that this "is not yet over".
Ha Thu (according to Reuters, Fox)
