Federal Reserve Chair Jerome Powell said Wednesday he will remain on the Board of Governors after his chairmanship ends May 15, denying President Donald Trump a majority on the seven-member board while a Justice Department investigation into the central bank's headquarters renovation plays out.
"I will continue to serve as a governor for a period of time to be determined," Powell said at his post-meeting news conference. He tied his stay directly to the building probe. "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."
Powell's decision resolves one of the larger questions hanging over the Federal Open Market Committee's April meeting. Markets had already priced in no rate change. The bigger uncertainty was whether Powell would vacate his governor's seat immediately, handing Trump room to appoint a loyalist and shift the board's balance before his designated successor takes over.
By staying, Powell keeps Trump's confirmed appointees, Christopher Waller and Michelle Bowman, from forming a majority. Trump appointee Stephen Miran, whose term has expired, will leave once Kevin Warsh is confirmed. Warsh cleared a significant procedural hurdle Wednesday when the Senate Banking Committee voted to advance his nomination to the full Senate floor.
Powell congratulated Warsh and was explicit about the role he intends to play once Warsh is sworn in. "I plan to keep a low profile as a governor," he said. "There's only ever one chair. When Kevin Warsh is confirmed and sworn in, he will be that chair."
The renovation investigation has been a persistent source of friction between Powell and the Trump administration. U.S. Attorney Jeanine Pirro subpoenaed Powell, but a court threw out the effort. Pirro has vowed to appeal. In recent days, she referred the investigation to the Fed's inspector general, stripping out the criminal element and helping clear a political obstacle that had threatened to delay Warsh's confirmation process.
Powell used the news conference to push back sharply on the political pressure he has faced from Trump, who first appointed him during his initial term. He called Trump's attacks "unprecedented in our 113-year history" and said the sustained criticism risks lasting damage to the institution.
"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. "It is so important for our economy, for the people that we serve, that they can depend, over time, on a central bank that operates that way, free of political influence."
Powell has served eight years total, first appointed as chair in 2018. His governor's seat carries two more years, giving him the legal standing to stay on the board well past mid-May if he chooses. How long he actually remains will depend on how quickly the renovation investigation reaches what he called "transparency and finality."
The full Senate vote on Warsh has not yet been scheduled.
