Trump has made his dislike of Powell known. But now the clash is coming.
Because Fed Chair Jerome Powell digs in for a huge fight against Donald Trump.
Powell Stays Put — And That’s a Problem for the President
Just when it looked like the path was clearing for President Donald Trump to put his stamp on the Federal Reserve, Jerome Powell threw a wrench in the works. The outgoing Fed chair announced Wednesday that he won’t be walking out the door entirely when his chairmanship ends May 15 — he’ll stick around as a governor, clinging to a board seat that could have been Trump’s to fill.
Powell, who has wielded extraordinary influence over the U.S. economy for eight years, confirmed he will continue serving as a Federal Reserve governor even after handing over the gavel. The move is widely expected to irritate the president and stoke further tensions between the White House and the central bank.
Had Powell stepped away entirely, Trump would have gained another appointment to shape the Fed’s direction. Instead, Powell’s decision to remain means the president’s influence over monetary policy hits a calculated wall.
“I plan to keep a low profile as a governor. There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair,” Powell told reporters at Wednesday’s press conference.
A DOJ Investigation and a Promise to Hold On
Powell’s announcement came loaded with conditions. He made clear his continued presence at the Fed is tied directly to the outcome of a Department of Justice investigation — one that had already delayed the confirmation of Trump’s handpicked Fed successor.
“I will not leave the board until this investigation is fully resolved with transparency and finality,” Powell said. “I’m encouraged by recent developments and I am watching the remaining steps in this process carefully. My decisions on these matters will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve.”
The investigation centered on Powell’s congressional testimony regarding costly renovations to the Fed’s Washington headquarters — a controversy that gave Sen. Thom Tillis (R-N.C.) enough cause to threaten a blockade of Trump’s chosen replacement. Tillis called the DOJ probe “bogus” and vowed to hold up Kevin Warsh’s nomination until it was dropped, even while praising the quality of Trump’s pick.
With the investigation now closed, a Senate panel is expected to advance Warsh’s nomination toward a full Senate vote. The former Morgan Stanley banker and one-time Fed governor — who made history as the youngest member of the board at age 35 — is now on a clearer path to confirmation.
Powell also took a pointed swipe at what he described as ongoing institutional pressures. “There are widespread concerns that these things will continue to happen,” he said, in a thinly veiled reference to the Trump administration’s persistent efforts to exert influence over the central bank.
Trump’s New Fed Takes Shape — Despite Powell’s Resistance
The bigger picture here strongly favors Trump’s long-term agenda. What began as a heated dispute over interest rates has grown into a defining battle over who should control one of the most powerful economic levers in the world — and the president is winning the structural argument.
Trump originally appointed Powell back in 2017, selecting him to succeed Janet Yellen. Powell was later reappointed by President Joe Biden in 2022 for a term expiring May 15 — but his underlying seat as a Fed governor technically runs through 2028, giving him the legal standing to stay on.
That legal technicality is precisely what’s frustrating Trump’s allies. Rather than a clean break, Powell’s lingering presence keeps a disruptive voice at the table even as Warsh prepares to take charge.
Still, momentum is unmistakably on Trump’s side. Warsh — a lawyer and finance veteran who shares Trump’s appetite for a more assertive approach to monetary policy — is positioned to reshape the institution from the top. Meanwhile, the Supreme Court is expected to weigh in on a separate case involving Fed Governor Lisa Cook, a ruling that could further define the limits of presidential power over the central bank and potentially hand Trump an additional win.
With inflation still a concern, the economic fallout from the war in Iran rattling global markets, and midterm elections looming, the stakes for who leads the Fed next could hardly be higher. Powell may have bought himself a few more months in the building — but the era he represents is drawing to a close.
