US Federal Reserve Chair Jerome Powell said he would remain at the central bank as a governor after his term as chair expires, 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 told a news conference on Wednesday.
Photo: EPA
The last outgoing chair to remain on the board was Marriner Eccles, who stayed on as a policymaker 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 would emerge as an alternative, “shadow” leader of the Fed by saying he does not plan to lead any resistance to his successor.
US 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.”
US Secretary of the Treasury 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 Fed governors Michelle Bowman and Christopher Waller, who were also picked by Trump.
Powell’s term as Fed chair ends on May 15, but his seat on the Fed’s Board of Governors does not expire until 2028.
“I’m not looking to be a high-profile dissident or anything like that,” Powell said.
The political attacks on the Fed dominated Powell’s final news conference as head of the central bank.
While Powell said he was encouraged by a decision by the US Department of Justice last week to drop a controversial criminal probe 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 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 last month said he planned to stay at the central bank until the justice department investigation into him and the central bank is complete, so yesterday’s announcement was not unexpected.
Warsh and Powell have been 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.
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