Trump's Pressure Fails; Powell Says He Will Remain as Fed Chair Until Successor Is Confirmed

On Wednesday, U.S. Federal Reserve Chair Jerome Powell stated that he will remain in his position and continue to lead the Fed as long as his successor has not been confirmed by the Senate after his term ends in mid-May.

This outcome is exactly the opposite of the direction pushed by President Donald Trump.

Over the past few months, Trump has exerted unusually strong pressure on Powell, publicly demanding significant rate cuts and even threatening to remove him before the end of his term. This pressure peaked after the Justice Department launched a criminal investigation into Powell’s testimony to Congress last summer regarding the Fed’s $2.5 billion office building renovation project.

However, this pressure has backfired.

Tom Tillis, a Republican senator from North Carolina and a key member of the Senate Banking Committee, refused to advance Kevin Wirth’s nomination to succeed Powell unless the Justice Department’s investigation into Powell is officially concluded.

This obstacle has stalled the government’s original timetable and could prolong Powell’s tenure, which the White House has been trying to force out for months.

In January, Trump indicated he would nominate former Fed director Wirth, but the Senate has yet to schedule a hearing.

Powell told reporters on Wednesday, “That’s how the law is written.”

He added that there have been multiple precedents, including during the Biden administration when his first term as chair ended before the Senate completed his reappointment.

Powell also said he will not leave the Fed until the Justice Department’s investigation is over.

Even after stepping down as chair, he can choose to remain as a Fed governor until early 2028, maintaining a key seat on the seven-member Federal Reserve Board and preventing the White House from immediately filling that position.

He stated, “Until the investigation is thoroughly concluded and transparent, and a final conclusion is reached, I have no intention of leaving the Board.”

The White House did not respond to requests for comment.

Some analysts believe that breaking the current deadlock is actually simple; the government just chooses not to do so.

Investment manager Mark Spindel said, “The government holds the key to resolving this deadlock.”

He explained, “Trump could end this in a second—Tillis would back down, Wirth would be confirmed quickly. It’s entirely something the president could resolve immediately.”

A week before Powell made these remarks, Chief Judge James Boasberg of the Washington District Court dismissed two subpoenas related to the investigation, ruling that the investigation lacked basis.

Jening Piro, a U.S. prosecutor and an important ally of Trump, said the Justice Department would appeal and downplayed concerns that the investigation might delay Wirth’s confirmation process.

The fight over Fed leadership is not limited to Powell.

Trump also attempted to remove Fed Governor Lisa Cook, but the Supreme Court has indicated that she likely can remain in her position during her legal challenge to her removal.

This means the White House’s efforts to reshape the Fed’s seven-member board are being blocked in two ways simultaneously.

According to two individuals familiar with internal discussions, recent concerns have arisen among Fed staff that the White House might initiate new legal disputes: for example, announcing a current Fed governor, such as former White House economic advisor Stephen M. Miller, as acting chair in mid-May.

These individuals requested anonymity due to the sensitive nature of the discussions.

Supporters of Trump cited a legal opinion written nearly 50 years ago for the Carter administration, which argued that the president has inherent authority to appoint an acting chair when the Fed chair position is vacant.

However, many within the Fed believe this legal interpretation is flawed.

Sources said this view has never been tested in court and has never been relied upon by any administration.

In the ruling dismissing the subpoenas, Judge Boasberg detailed a timeline showing that the timing of Trump’s public criticism of Powell’s rate policies coincided closely with his request for the Justice Department to investigate political opponents.

The judge stated that Piro “acted swiftly on Trump’s instructions,” launching the investigation last year, which “almost entirely lacked any evidence suggesting Powell committed a crime.”

Several members of the Senate Banking Committee—including the chair—have said they do not believe Powell has committed any crime.

At a press conference last Friday, when asked whether Trump had asked her to investigate the Fed chair, Piro did not explicitly deny it, only noting that Judge Boasberg’s listed dates were incorrect.

She said, “As long as you can provide information that might lead me to find a crime, I am even willing to take a case handed to me by the devil. The source of the case doesn’t matter.”