Jerome H. Powell said Wednesday that he would remain at the helm of the Federal Reserve after the expiration of his term as chair in mid-May, as long as his successor has not yet been confirmed by the Senate.
That is the opposite outcome that President Donald Trump has been pushing for. For months, Trump has waged an unusually aggressive campaign against Powell — publicly demanding steep interest rate cuts and at times threatening to try to remove Powell before his term expired. This culminated when the Justice Department launched a criminal investigation into Powell over brief congressional testimony last summer connected to a $2.5 billion office renovation at the central bank.
That pressure has backfired. North Carolina Sen. Thom Tillis, a key Republican on the Senate Banking Committee, has refused to allow Kevin Warsh’s nomination to succeed Powell to advance until the Justice Department inquiry into Powell is closed — a bottleneck that has left the administration’s own timeline in limbo and may extend the tenure of the very chair the White House has spent months trying to push out. Trump said in January that he would nominate Warsh, a former Fed governor, but the Senate has yet to schedule a hearing on the nomination.
“That is what the law calls for,” Powell told reporters Wednesday, adding that it is what has been done on several occasions, including when his initial term as chair lapsed during the Biden administration and the Senate had yet to reconfirm him.
Powell also said that he wouldn’t step down from the Fed until after the Justice probe is finished. Even after he steps down as chair, Powell could elect to stay through early 2028 as one of seven members of the Fed’s board of governors in Washington, depriving the White House of a crucial seat on the board.
“I have no intention of leaving the board until the investigation is well and truly over with transparency and finality,” he said.
A request for comment by the White House was not returned.
Some analysts say the path forward is simple, albeit one the administration has declined to take. Mark Spindel, an investment manager who co-wrote a history of Fed independence, said the administration holds the key to breaking the impasse.
“Trump could end this in one second, Tillis would back down and Warsh would be confirmed ASAP,” he said. “It’s certainly something that the president can resolve immediately.”
Powell’s comments come a week after Chief U.S. District Judge James E. Boasberg in D.C. quashed a pair of subpoenas tied to the investigation, ruling the inquiry lacked merit. U.S. Attorney Jeanine Pirro, a close ally of Trump, said the Justice Department would appeal the ruling — brushing off concerns that the inquiry could delay Warsh’s confirmation.
The fight over Fed leadership extends beyond Powell. Trump has also moved to fire Fed governor Lisa Cook, though the Supreme Court has signaled it would likely allow her to remain on the board while she challenges the dismissal in court, leaving the White House’s effort to reshape the Fed’s seven-member board stalled on two fronts.
Fed staff have in recent weeks come to believe that the White House might attempt to open yet another legal battle by declaring another sitting Fed governor, perhaps former White House economic adviser Stephen Miran, as acting chief come mid-May, according to two people familiar with the deliberations, who spoke on the condition of anonymity to share sensitive conversations.
Specifically, Trump-aligned commentators have pointed to a nearly 50-year-old legal opinion written for the Carter White House that concluded the president has inherent authority to designate an acting Fed chair when a vacancy arises.
The Fed has generally had the view that the interpretation is faulty, the people said. It has never been tested in court, and no administration has relied on it.
In his ruling quashing the subpoenas to the Fed, Boasberg laid out a timeline showing how Trump’s public criticisms of Powell over his handling of interest rates coincided with the president’s calls to have the Justice Department investigate his perceived political foes. The judge said Pirro “promptly complied” with Trump’s directions, launching an inquiry last year that Boasberg said was premised on “essentially zero evidence to suspect Chair Powell of a crime.”
Several members of the Senate Banking Committee before which Powell was testifying, including its chair, say they don’t believe Powell committed a crime.
Asked at a news conference Friday whether Trump had directed her to investigate the Fed chairman, Pirro did not specifically deny it, saying only that some of Boasberg’s dates were incorrect in his timeline.
“I’ll deal with the devil — I’ll take a case from the devil — if you can give me information that will lead me to possibly find a crime,” she said. “It doesn’t matter where a case comes from.”
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