(April 30) : Jerome Powell said he’ll remain at the Federal Reserve as a governor after his term as chair of the central bank ends, putting an end to months of speculation as to whether he planned to stay or go.
The decision breaks with the precedent of past Fed chairs leaving the institution when their leadership term expires, but Powell said ongoing threats of criminal investigations into him and the central bank left him with no option but to stay.
“After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined,” Powell said Wednesday at a press conference.
The last outgoing chair to remain on the board was Marriner Eccles, who stayed on as a policy maker until 1951 after his term as head of the central bank ended in 1948.
Powell attempted to head off any criticism of his decision and to hose down concerns that he will emerge as an alternative, “shadow” leader of the Fed by stressing he doesn’t plan to lead any resistance to his successor. President Donald Trump has nominated former Fed Governor Kevin Warsh to be the next chair.
“I plan to keep a low profile as a governor,” he said. “There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair.”
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Treasury Secretary Scott Bessent criticized his decision in an interview on Fox Business, saying it was a “violation of all Federal Reserve norms” and amounted to an “insult” to Warsh and Governors Michelle Bowman and Christopher Waller, who were also picked by Trump.
Powell’s term as Fed chair ends on May 15 though his seat on the Board of Governors doesn’t expire until 2028.
“I’m not looking to be a high profile dissident or anything like that,” Powell said.
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The political attacks on the Fed dominated Powell’s final press conference as head of the central bank.
While Powell said he was encouraged by a decision by the Justice Department last week to drop a controversial criminal investigation into building-renovation cost overruns at the Fed’s headquarters in Washington, he cautioned that political pressures on the central bank remain.
In announcing the end of the DOJ probe, US Attorney for the District of Columbia Jeanine Pirro said she had asked the Fed’s internal watchdog to take over looking into the construction project, but also promised to restart her investigation “should the facts warrant doing so.”
“The institution is being battered over these things,” Powell said. “My concern is legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors.”
Powell had already in March said he planned to stay at the central bank until the Justice Department investigation into him and the central bank is complete, meaning today’s announcement wasn’t unexpected.
Both Warsh and Powell have served on the Fed board — Warsh served from 2006 to 2011, before Powell joined in 2012 — and worked for investment firms that are well known on Wall Street. Powell worked for the private equity firm Carlyle Group LP while Warsh worked with Stanley Druckenmiller at the famed billionaire investor’s family office.
In a nod to the narrow channels through which Washington policy makers circulate, Powell said he wished Warsh well and recounted that they last spoke at a social function shortly after the incoming chair’s nomination was announced.
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“I haven’t seen him since seeing him at a dinner in January where I congratulated him and had a nice chat with him,” Powell said.
Still, he stopped short of a ringing endorsement of Warsh’s pledge during his confirmation hearings to defend the Fed’s independence from the White House.
“I’ll take him at his word,” Powell said.
uploaded by Isabelle Francis
