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Jerome Powell extends his influence on the Federal Reserve’s board of governors, defying political pressures and signalling a shift in the fight over central bank independence amid economic uncertainties and geopolitical tensions.<\/p>\n<\/div>\n
Jerome Powell has said he will remain on the Federal Reserve\u2019s board of governors after his term as chair ends on 15 May, extending his influence at a moment of unusual strain between the central bank and the White House. According to the Associated Press, Powell framed the decision as a response to what he described as unprecedented legal pressure from the Trump administration, which he said has threatened the Fed\u2019s independence. His governor\u2019s seat runs until early 2028, and his move will prevent President Donald Trump from immediately gaining another appointment to the Fed\u2019s governing board.<\/p>\n
The announcement came after the Fed left its benchmark rate unchanged, a decision that underscored how cautious policymakers remain in the face of sticky inflation and uncertainty over the economic outlook. Reuters reported that the central bank signalled it could still cut rates later this year, even as several officials dissented on both sides of the debate over whether policy should already be moving lower. Powell said the Federal Open Market Committee was still trying to balance signs of steady growth against higher energy prices linked to tensions in the Middle East.<\/p>\n
Powell\u2019s choice also reshapes the transition to his successor. Trump\u2019s nominee, Kevin Warsh, has been lined up to take over as chair, but Powell\u2019s continued presence on the board may make it harder for the next chair to build consensus quickly. The AP noted that this is the first time since 1948 that a Fed chair has stayed on as a governor after stepping down as chair, a break with long-standing precedent that reflects the depth of the current dispute over central bank independence.<\/p>\n
The legal backdrop has been shifting as well. The Washington Post reported last week that the Justice Department ended its own investigation into Powell, after saying the Fed\u2019s inspector general would review the renovation issues instead. That decision removed one obstacle to Warsh\u2019s confirmation, but it did not end the broader political fight around the Fed. Powell, speaking at his news conference, said the real concern was the accumulation of legal attacks on the institution and warned that monetary policy must not be shaped by political considerations.<\/p>\n
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