Jerome Powell said he plans to remain on the Federal Reserve Board after his term as chair ends next month, citing legal attacks by the Trump administration. The Fed kept its benchmark interest rate steady. Powell staying limits President Donald Trump’s ability to appoint a new governor as Kevin Warsh advances in the Senate.
International
-Sathish Raman
Jerome Powell said the legal pressure on the US Federal Reserve shaped a plan to stay. Powell said Powell would remain on the Fed’s governing board after the chair term ends. Powell said the period is not set. Powell linked the decision to repeated Trump administration attacks on the central bank.
Jerome Powell said he plans to remain on the Federal Reserve Board after his term as chair ends next month, citing legal attacks by the Trump administration. The Fed kept its benchmark interest rate steady. Powell staying limits President Donald Trump’s ability to appoint a new governor as Kevin Warsh advances in the Senate.
Powell said the criticism risked weakening the institution in ways that harm the public. “I worry these attacks are battering this institution and putting at risk the things that really matter to the public,\” Powell said. Powell spoke after the Fed kept its benchmark interest rate unchanged. Powell’s chair term ends on May 15.
Federal Reserve board seat and Trump administration plans
Powell staying on blocks President Donald Trump from filling a vacant board seat soon. The Fed board has seven members. The Senate Banking Committee approved Kevin Warsh as the next chair. The committee vote followed party lines. Powell could keep serving as a Fed governor until January 2028.
U.S. Attorney for the District of Columbia Jeanine Pirro wrote on X on Friday about a Fed inquiry. Pirro said the office ended a probe into the Fed’s large building renovations. Pirro said the Fed’s inspector general would review the work. Pirro also said the office may reopen it if facts warrant.
Powell said that step did not end concerns about closure and clarity. \”Im waiting for the investigation to be well and truly over with finality and transparency,\” Powell said. \”Im waiting for that and i will leave when i think it appropriate to do so.\” Powell did not give an exit date.
Federal Reserve interest rate decision and record dissents
The Fed kept the benchmark interest rate steady on Wednesday for a third meeting. The Fed still signalled possible rate cuts in coming months. The decision drew the most dissents since October 1992. Three officials opposed language pointing to a future cut. A fourth, Stephen Miran, backed an immediate cut.
The split highlighted divisions on the Fed’s 12-member rate-setting committee. The disagreements came before Powell’s May 15 end date as chair. The Fed said Middle East developments were raising uncertainty. The Fed also said inflation stayed elevated. The Fed tied part of that pressure to higher global energy prices.
The three dissenters opposing hints of future cuts were Beth Hammack and Neel Kashkari. Lorie Logan also dissented on that point. Hammack leads the Cleveland Fed, Kashkari leads Minneapolis, and Logan leads Dallas. Miran joined the Washington board after a Trump appointment last September.
Federal Reserve leadership change and inflation hurdles
Warsh has promised regime change at the central bank. Warsh may alter economic models, communications strategy, and the balance sheet approach. Warsh argued for rate cuts, aligning with Trump’s demands. Inflation above 3% could make cuts harder. The Fed’s inflation target is 2%.
The dissents could revive friction with the Trump administration over regional Fed leaders. White House officials have criticised bank presidents in the past. Regional presidents have more often dissented in past votes. Washington-based governors typically back the chair. This pattern could shape internal dynamics under Warsh.
Some analysts warned Powell staying could create a \”two Popes\” situation. That would leave a chair and former chair serving together on the board. Critics said it could deepen divisions if some follow Powell over Warsh. Powell rejected that idea and said, \”My intention is not to interfere.\”
Economic conditions also complicated the Fed’s choices as Powell’s chair term neared its end. Inflation rose to 3.3%, a two-year high, as the war lifted gas prices. That tends to limit rate cuts. The Fed often holds rates, or raises them, when inflation worsens.
At the same time, hiring nearly stalled and job seekers faced longer searches. The Fed usually cuts rates when jobs weaken to support spending. Layoffs stayed low as firms followed a \”low-hire, low-fire\” approach. Many officials said low unemployment reduced the need for cuts.
Unemployment eased to 4.3% in March, down from 4.4%. That data point supported the view that the labour market remained steady. Still, weak hiring added another risk for policymakers. With Powell set to leave the chair on May 15, attention stayed on how Warsh may act. Powell said Powell would depart the board when it felt appropriate.
With inputs from PTI
