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Powell Vows to Stay as Fed Chair Until Successor Confirmed, Amid Investigation and Rate Hold

Federal Reserve Chair Jerome Powell declared he will remain in office until his successor, Kevin Warsh, is Senate-confirmed and will not exit the Fed's Board of Governors until a DOJ investigation is fully resolved. The Fed held interest rates steady, citing inflation and U.S.-Iran war risks, contrary to President Trump's demands for cuts. A federal judge blocked DOJ subpoenas in the Powell probe, suggesting political motivation, which the DOJ plans to appeal. Political tensions surround the investigation, with some Republicans linking it to pressure on the Fed. Powell stressed his decisions prioritize institutional integrity over political influence.

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Powell Vows to Stay as Fed Chair Until Successor Confirmed, Amid Investigation and Rate Hold

Federal Reserve Chair Jerome Powell announced he will remain in his role until his nominated successor, Kevin Warsh, is confirmed by the Senate, and he will not leave the Fed's Board of Governors until a Department of Justice investigation into him is fully resolved. This follows the Fed's decision to hold interest rates steady amid inflation concerns and geopolitical tensions, despite pressure from President Trump for cuts.

Powell's Tenure and Succession Plans

  • Powell stated he will serve as "chair pro tem" if Warsh, President Trump's pick, is not confirmed by the Senate when his term ends in May, citing legal precedent.
  • He clarified that his position on the Board of Governors, which extends until early 2028, is separate from the chairmanship, and he has not decided whether to leave before that term ends.
  • "I have not made that decision yet," Powell said, emphasizing he will act based on what is best for the Fed institution and the public it serves.

Fed's Interest Rate Decision

  • The Federal Reserve opted to keep interest rates unchanged in its latest policy meeting.
  • Key reasons include higher-than-expected inflation data and uncertainty from the ongoing U.S.-Iran war.
  • This move defies repeated public calls from President Trump for the Fed to cut rates to boost the economy, even as oil prices spike.

DOJ Investigation and Court Ruling

  • A federal judge, James Boasberg, recently blocked grand jury subpoenas issued by the DOJ in its criminal investigation of Powell, ruling they lacked a proper purpose.
  • Judge Boasberg wrote that "a mountain of evidence" suggests the subpoenas were aimed at pressuring Powell to lower interest rates or resign.
  • The DOJ, through U.S. Attorney Jeanine Pirro, announced it will appeal the ruling, calling it "outrageous" and without legal authority.

Political Pressure and Reactions

  • The DOJ probe has become a political flashpoint, with critics alleging a coordinated effort by Trump allies to influence the Fed.
  • Senator Thom Tillis (R-N.C.) said he would block Warsh's confirmation until the federal investigation concludes.
  • Powell indicated he wants to avoid any appearance that political force is driving his potential departure from the Fed board.
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