Remaining as Governor + Interim Chair? Powell Reveals for the First Time He's Not in a Hurry to Leave the Fed—What Does This Mean?

The Federal Reserve Chair Jerome Powell publicly stated on Wednesday for the first time that he will not leave the Fed until the criminal investigation by the U.S. Department of Justice is concluded. This is Powell’s first public mention of his plans to step down.

Powell’s stance has significant implications for President Trump’s efforts to reshape the Federal Reserve. If Powell remains on the Federal Reserve Board, Trump loses a seat that he could have appointed himself. Currently, three of the seven Fed governors are appointed by Trump.

Powell also indicated that even if his term expires, he might continue serving as interim chair until his nominated successor, Kevin Wirth, is confirmed by the Senate. Previously, a senior Republican senator vowed to block Wirth’s nomination as long as the investigation by federal prosecutor Jenean Piro into Powell remains ongoing. With less than two months left in Powell’s term, Wirth’s confirmation process has effectively stalled.

Powell’s firm stance could create a rift between Piro and Trump. Piro, a former Fox News host appointed by Trump as the U.S. Attorney for the District of Columbia, has vowed to push forward with her investigation into Powell. While Trump wants the Fed to bow to his wishes, he faces many obstacles, including Piro’s investigation.

“Until the investigation is thoroughly and transparently concluded, I have no intention of leaving the Board,” Powell said at a press conference after the Fed’s policy decision, referring to his seat on the Federal Reserve Board.

Additionally, Powell hinted that he might stay on even after Piro’s investigation ends. “I have not made that decision yet. I will decide based on what I believe is best for the institution and the people we serve,” Powell said.

Although Powell’s chairmanship will end in mid-May, his term as a Fed governor will last until January 31, 2028.

Historically, Fed chairs rarely stay on after their terms end. The last person to do so was former Chair Marriner Eccles, who was asked to remain by President Truman in 1948.

Interim Chair

Powell said that continuing as interim chair during the leadership vacuum caused by Wirth’s delayed confirmation is “a legal requirement.”

“If my successor has not been confirmed before my term ends, I will serve as interim chair,” Powell stated.

“We have done this before, including after my first term, and we will do so again,” he added, referencing the Senate’s delay in confirming his reappointment in 2022.

Senate Banking Committee Republican Tom Tillis has said he will not allow Wirth’s confirmation until the investigation into Powell is complete. Last week, a U.S. judge overturned a subpoena issued by Piro to Powell and the Fed, which could have advanced the nomination process, but Piro announced she would appeal the ruling, likely causing further delays.

Since 1978, there have been three instances where the Senate had not confirmed a new Fed chair at the end of the incumbent’s term, and the sitting chair served as acting chair—referred to as “interim chair” by the Fed. Two of these cases, in 1996 and 2022, involved chairs awaiting confirmation for a second term. In 1978, the White House asked the outgoing chair to stay until their successor took office.

Fed Power Struggles

As Powell made these remarks, relations between Trump and the Fed are at a rare standstill. Since returning to the White House over a year ago, Trump has repeatedly criticized the Fed for not cutting interest rates sharply enough and has threatened to fire Powell multiple times.

Trump also attempted to dismiss Fed Governor Lisa Cook, a case now before the Supreme Court.

In response to the legal investigation into his handling of the Washington headquarters renovation project, Powell strongly countered, saying the investigation is essentially a punishment for the Fed’s independence and refusal to follow Trump’s monetary policy wishes.

A judge agreed. Chief Judge James Boasberg of the U.S. District Court for the District of Columbia wrote, “The (Trump) administration has provided no evidence that Powell committed any crime other than ‘offending the President.’ They might as well investigate him for mail fraud, given that someone saw him send a letter.”

Because the Fed chair also serves as a governor, and each position has different terms, succession issues are highly complex. Further complicating matters, members of the Federal Open Market Committee (FOMC) are responsible for electing the Chair of the FOMC, although this position has traditionally been held by the Fed Chair.

The legal challenges against the Fed by the Trump administration are widely seen as exerting pressure on the central bank’s independence. Congress grants the Fed the authority to set interest rates independently.

Many Fed officials and private sector economists believe that monetary policy free from political interference yields better economic outcomes. Central bank leaders who are directly subordinate to the government often perform poorly in controlling inflation—this was pointed out by New York Fed President Williams in early January.