Fed Chair Powell May Stay on Board After Term Ends, Court Documents Reveal

Federal Reserve Chairman Jerome Powell is considering staying on as a board member after his leadership term expires in May, breaking with tradition. The revelation came through court documents related to a Justice Department investigation into Powell's handling of Fed headquarters renovations.

Federal Reserve Chairman Jerome Powell is contemplating remaining as a board member when his leadership role concludes in May, according to court documents made public Friday in Washington.

The information emerged from legal filings connected to the Fed’s successful effort to prevent Justice Department subpoenas in a criminal probe examining Powell’s management of the central bank’s Washington headquarters renovation project. A federal district court judge sided with the Fed and blocked the subpoenas Friday.

During a January 29th meeting with U.S. District Attorney Jeannine Pirro, Powell’s legal team indicated their client’s thinking, according to Justice Department lawyers opposing the Fed’s legal motion. The attorneys stated: “The Chair (Powell) feels like he would not leave the Board when his term as Chair expires, if he was still under investigation; and while he could not say the converse is true, it would be a different look to the Chair if he was not facing criminal investigation and the Chair would be free to make a decision that would focus on his family.”

Powell’s lawyers also noted that President Donald Trump, who has pushed for lower interest rates, “does not have enough votes in the Senate to confirm a new Board Chair,” the documents showed.

Trump has nominated former Fed Governor Kevin Warsh to replace Powell, though Warsh encounters confirmation hurdles.

The 73-year-old Powell has not publicly announced his intentions regarding the conclusion of his chairmanship, but his potential continuation as a governor could prove significant. His position might serve as a crucial swing vote on the Fed’s seven-member governing panel.

Historically, Fed chairs step down from their board positions when successors assume leadership, but concerns about Federal Reserve independence and Trump’s potential influence through additional appointments have fueled speculation that Powell might break this tradition.

No precedent exists for how a former chair might operate while still participating in monetary policy discussions and votes, or how such an arrangement would affect relations with Warsh.

Powell’s governor appointment runs through January 2028, extending beyond November’s midterm elections and into Trump’s final presidential year.

The Federal Reserve declined to comment on the unsealed document contents.

Justice Department attorneys characterized Powell’s lawyers’ remarks as “strongarming” the U.S. attorney by suggesting he would depart the board if the investigation ended.

“By making this peculiar suggestion, the Board morphed the Subpoenas into the exact thing about which they complain,” by attempting to introduce politics into the matter, the legal filing argued.