The US Justice Department’s investigation into Federal Reserve Chair Jerome Powell has drawn fresh focus to a major question facing the central bank in the months ahead. When Powell’s term as chair ends, will he step away from the Federal Reserve altogether, or will he remain in his less prominent role as a governor?
Powell’s term as chair expires on 15 May. However, his position on the Fed’s seven-member Board of Governors runs separately and does not end until 31 January 2028. In the past, almost all Fed chairs have resigned from the board once their leadership term concluded. If Powell chooses to stay, he would be the first to do so in nearly five decades.
Some Federal Reserve observers believe the criminal investigation into Powell’s testimony regarding cost overruns tied to Fed building renovations was meant to pressure him into leaving the board. His continued presence would prevent the White House from appointing enough members to secure a majority, potentially limiting the Trump administration’s ability to exert greater influence over an institution that has traditionally operated at arm’s length from political power.
David Wilcox, a former senior Federal Reserve economist and now a fellow at the Peterson Institute for International Economics, said he expects Powell to remain in place. “I find it very difficult to see Powell leaving before midnight on 31 January 2028,” Wilcox said. “This is a serious threat to the Fed’s governance structure as we’ve known it for 90 years, and I think Powell takes that responsibility very seriously.
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