Federal Reserve Chair Jerome Powell announced he will stay on the Fed Board of Governors after his term as Chair ends on May 15, 2026, citing an ongoing Department of Justice (DOJ) investigation as the reason he cannot retire.
The decision keeps Powell in his governor seat through January 2028 and prevents President Donald Trump from filling a fourth Board of Governors slot, a move that would have given the administration tighter influence over monetary policy votes.
Powell Stays on as Fed Governor
Powell delivered the announcement at what he confirmed was his final press conference as Fed Chair. He told reporters he had planned to retire when his current term ended, but legal pressure from the Trump administration had altered that calculation.
Powell said he would wait until the active Department of Justice investigation reached its conclusion before stepping away from the Board.
He also rejected the idea that he would operate as a “shadow chair” from his governor seat.
“I would never do the ‘shadow chair thing’. I propose to be constructive participant on board,” he stated.
Powell also congratulated Kevin Warsh, the Trump nominee expected to take over as Chair on May 15.
Trump Loses Path to 4-Seat Board Majority
Three of the seven seats on the Board already belong to Trump appointees from his prior term. A vacated Powell seat would have opened the door for a fourth ally, giving the administration a working majority on FOMC votes.
Powell’s decision to stay through January 2028 closes that opening. Trump can still install Warsh, but the broader vote balance on the Federal Open Market Committee (FOMC) remains intact for now.
Notably, Powell is the only current governor appointed by presidents of both parties. At first, former US President Barack Obama appounted him, then as chair by Trump, and later reappointed by Joe Biden.
Trump already appointed Michelle Bowman and Christopher Waller, and is expected to fill another seat with Kevin Warsh, potentially tipping control of the board.
Some see the move as resistance rather than confrontation, while others described the decision as a quiet power move that limits how quickly the administration can reshape rate-cut policy.
Warsh Advances as Markets Eye Faster Cuts
The Senate Banking Committee cleared Warsh in a 13-11 vote earlier today, putting him in line for a full Senate confirmation ahead of the May 15 transition.
Trump nominated Warsh on a platform of lower interest rates, a stance that has drawn enthusiastic responses from crypto markets in recent weeks.
Powell himself acknowledged Wednesday that internal projections had shifted, with the number of FOMC participants seeing a rate hike now roughly equal to those expecting a cut.
That divergence could complicate the runway for the aggressive easing Trump has pushed for.
“I’ll take him at his word,” Powell responded when asked if he was confident that Kevin Warsh would stand up to political pressure from President Trump.
Whether Powell’s continued presence slows that path to rate cuts moving forward will depend on how the remaining Board seats vote on each meeting agenda.
The first FOMC under Warsh’s leadership will offer the earliest test of whether the new Chair can build consensus for the cuts the administration wants.
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