Jerome H. Powell said on Wednesday that he will continue serving as a governor at the Federal Reserve after his term as chair ends on May 15, signaling an unusual break from precedent amid mounting political and legal pressures.
“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 at the news conference on Wednesday.
The decision follows months of speculation over whether Powell would step down entirely or remain on the Board of Governors, a role he is eligible to hold until January 2028.
His move comes at a time of heightened tensions between the central bank and Donald Trump, who has repeatedly pushed for lower borrowing costs.
Legal concerns drive decision
Powell said his decision was shaped by ongoing concerns about legal challenges facing both him and the institution.
“I’ve said that I will not leave the board until this investigation is well and truly over with transparency and finality, and I stand by that. I’m encouraged by recent developments, and I’m watching the remaining steps in this process carefully,” Powell said near the beginning of his post-meeting news conference.
“My decisions on these matters will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve after my term as chair ends on May 15, and will continue to serve as a governor for a period of time to be determined,” he added.
Although the Justice Department recently indicated it would drop its investigation into the Federal Reserve’s headquarters renovation project, Powell suggested the matter was not fully resolved.
On questions about whether he would be viewed as political for staying on, Powell said he had “no choice” and that he had wanted to leave, but legal threats forced him to stay.
Break from long-standing tradition
Federal Reserve chairs typically step down at the end of their four-year terms unless reappointed, allowing for a smoother leadership transition.
The last time a chair remained on the board after their term ended was in 1948, when Marriner Eccles continued as a governor for three years.
Powell acknowledged that his decision departs from that tradition but said current circumstances warranted continuity.
He also indicated that he would maintain a “low profile” while remaining on the board.
Tensions with administration intensify
Powell’s move underscores growing concerns about the Fed’s independence as the administration steps up scrutiny of the central bank.
The Justice Department’s probe into renovation costs, as well as attempts to remove Governor Lisa D. Cook over alleged misconduct, have heightened fears about political interference.
Powell has previously described the investigation as part of broader pressure on the Fed to cut interest rates.
“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 said.
President Trump has repeatedly criticised the central bank’s stance on monetary policy and has suggested he could seek Powell’s removal.
A president can dismiss a Federal Reserve official only for cause, typically defined as serious misconduct or dereliction of duty.
However, Trump has framed the renovation issue as evidence of “incompetence” and raised questions about potential wrongdoing.
Outlook for Fed leadership
Powell’s decision to remain on the board sets the stage for a potentially contentious transition period.
If he stays beyond May 15, it could complicate the administration’s plans for appointing a successor and maintaining influence over monetary policy.
At the same time, his continued presence may provide a degree of institutional stability during a period of economic and political uncertainty, particularly as debates over interest rates and inflation remain central to the policy outlook.
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