Jerome Powell may stay on Fed board after chair term ends
Unsealed documents show Jerome Powell may stay on the Fed board after his chair term ends in May. The possibility was raised during a federal investigation.
Attorneys for Federal Reserve Chair Jerome Powell have discussed the possibility of him remaining on the central bank's board of governors after his term as chair ends in May. This potential move, which would break long-standing tradition, was revealed in unsealed documents from a legal battle in the United States involving a Department of Justice investigation. The documents were part of a case in which the Federal Reserve sought to block subpoenas related to a criminal probe into Jerome Powell's handling of renovations at the central bank's headquarters. On Friday, a District Court judge ruled in favor of the Federal Reserve, blocking the subpoenas.
A Department of Justice lawyer argued that Jerome Powell's attorneys suggested his departure from the board was contingent on the investigation's outcome during a January meeting with U.S. District Attorney Jeannine Pirro.
The Chair feels like he would not leave the Board when his term as Chair expires, if he was still under investigation; and while he could not say the converse is true, it would be a different look to the Chair if he was not facing criminal investigation and the Chair would be free to make a decision that would focus on his family.
The government's legal team described these comments as an attempt to influence the prosecutor's office.
By making this peculiar suggestion, the Board morphed the Subpoenas into the exact thing about which they complain, by trying to inject politics into the discussion.
While Jerome Powell, 73, has not publicly commented on his plans, his term as a governor lasts until 2028. Traditionally, chairs leave the board when their leadership term ends to allow their successor a clean start. However, the current political climate and concerns over central bank independence have fueled speculation that he might stay. President Donald Trump has nominated former governor Kevin Warsh to succeed Jerome Powell, but Kevin Warsh faces a difficult path to confirmation in the Senate. If Jerome Powell remains as a governor, he would continue to hold a vote on monetary policy, creating an unprecedented dynamic between a former chair and a new leader. The Federal Reserve has offered no official comment on the unsealed filings.
