Powell to Stay on Fed Board as Chairmanship Ends

Outgoing Federal Reserve Chair Jerome Powell said he will remain on the central bank’s Board of Governors after handing over the chairmanship next month, an unusual move that comes amid legal scrutiny and concerns about the institution’s independence.

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Speaking after the Federal Reserve decided to keep interest rates unchanged on Wednesday, Powell told reporters he intends to stay on the board while his successor, Kevin Warsh, assumes the role of chair.

Powell said he expects to maintain a “low profile” as a governor once the transition takes place. His decision means it will be the first time since 1948 that a Fed chair has continued serving on the board after stepping down from the top post.

“I will leave when I think it's appropriate to do so,” Powell said.

Probe and Concerns Over Fed Independence

Powell indicated that his decision is linked to concerns about legal challenges facing the central bank. He referred to a criminal investigation by the U.S. Department of Justice that had targeted him over renovations at the Fed’s headquarters.

Although the investigation has since been dropped, the Justice Department has said it could reopen the case if necessary. Powell said he intends to remain on the board until the matter is fully resolved.

“I’ve said that I will not leave the board until this investigation is well and truly over with transparency and finality,” he said.

Powell also warned that legal actions against the Federal Reserve could threaten its ability to make decisions free from political pressure. He said the series of legal challenges directed at the institution were unprecedented in its history.

According to Powell, the issue is not criticism from elected officials but the use of legal action against the central bank, which he believes could undermine its ability to conduct monetary policy independently.

A Turbulent Final Stretch

Fed chairs typically step down completely once their term ends, but Powell’s departure follows a turbulent period that included political criticism and investigations related to the central bank’s building renovation project. The project also remains under review by an inspector general inquiry.

Throughout his tenure, Powell has tried to present himself as politically neutral, at times wearing purple ties to avoid signalling affiliation with either political party. He has also publicly resisted pressure from Donald Trump to cut interest rates.

Trump, however, originally appointed Powell to lead the Federal Reserve in 2017.

Economic Challenges Ahead

Powell’s departure from the chairmanship comes as the U.S. economy faces several uncertainties. The Federal Reserve is tasked with balancing its dual mandate: maintaining stable inflation near 2% while supporting maximum employment.

Recent global events have complicated that task. Supply disruptions following the pandemic pushed inflation higher, while Russia's invasion of Ukraine in 2022 added further pressure to energy and commodity markets.

More recently, rising oil prices linked to tensions surrounding Iran and the closure of the Strait of Hormuz shipping route have pushed gasoline prices to their highest levels since August 2022.

At the same time, the labour market has shown signs of softening. Hiring has slowed while layoffs remain relatively low, creating what economists describe as a “low hire, low fire” environment as companies adjust to economic uncertainty and the growing influence of artificial intelligence.

Powell’s Possible Role on the Board

Some policymakers have raised concerns about how Warsh might approach monetary policy once he takes over. Senator Elizabeth Warren has suggested that the incoming chair could face pressure to pursue rate cuts.

However, interest rate decisions are made collectively by the Federal Reserve’s policy-setting body, which has 12 voting members. Any changes must be approved by a majority.

By remaining on the board, Powell could still influence those discussions, potentially acting as a counterweight if political pressure intensifies.

Despite that possibility, Powell said he does not intend to become a prominent critic of the institution’s future direction.

Instead, he said he hopes tensions surrounding the Federal Reserve will ease and that policymakers will continue to work toward consensus.

As he closed what may be his final press conference as chair, Powell told reporters he expected to step back from the spotlight.

“Thank you, ladies and gentlemen,” he said. “I won’t see you next time.”

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Adapted by ASEAN Now. Source 30 April 2026