Jerome Powell says he will stay on Fed board, cites 'unprecedented' legal attacks
Federal Reserve Chair Jerome Powell announced that he will remain on the Fed’s Board of Governors after his term as chair ends May 15, due to what he called "unprecedented" legal attacks by the Trump administration on the central bank's autonomy. At his last press conference as chair on Wednesday, Powell said he had "long planned to be retiring,” but the events that occurred in the past three months had left him "no choice but to stay" until he sees them through.
In his address on Wednesday, after briefly talking about the Fed's function and its purpose, Powell said he welcomed the announcement of U.S. Attorney for the District of Columbia, Jeanine Ferris Pirro, of closing the criminal probe against him. Pirro had subpoenaed Powell, but the effort was thrown out by a court, a decision Pirro vowed to appeal. She then referred the investigation to the Fed's inspector general, removing the criminal element and helping clear a political roadblock as Democrats threatened to block Warsh's confirmation, until the probe against Powell was quashed.
However, Powell noted that Pirro stated that she would not hesitate to restart the investigation if there is a criminal referral from the Fed's inspector General. "I have 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 sadi, announcing that he will continue as a governor for a "period of time to be determined."
When asked about his decision to stay, Powell said his concern was "about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors." He noted that the action by the administration was "unprecedented" in the Fed's 113-year history and "there are ongoing threats of additional such actions." He expressed that he was worried that such actions could batter the institution and put its ability to control monetary policy without taking political factors into consideration at risk. "I had long planned to retire, but the things that have happened in the last three months have left me no choice but to stay until I see them through," Powell stated.
The Federal Reserve policymakers made their latest decision to hold the benchmark rate at a range of 3.5% to 3.75%, likely the last call under Powell's leadership, as per CNBC. At the same time, his anticipated successor, Kevin Warsh's nomination as Fed chair, was advanced from the Senate Banking Committee on the same day. In his address, Powell congratulated Warsh and wished him well before laying out the numbers. At the end of his address, he noted that it would be his last as the Fed Chair and that he would like to share his thoughts. He further added that he plans to keep a low profile as a governor, and when Kevin Warsh is confirmed and sworn in, he will be the chair. "Once sworn in as board chair, his new colleagues will elect him to chair the FOMC as well," Powell added.
