Headed into this week, it was widely assumed that the Federal Reserve would agree to leave existing interest rates intact, as the nation grappled with rising inflation and slow growth, and that’s precisely what happened: In what was widely seen as Jerome Powell’s final meeting as Fed chair, the Federal Open Market Committee did exactly what everyone expected it to do.
There was, however, one significant surprise that soon followed.
“After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined,” Powell said at a press conference.
Powell can hold his position until 2028, but Fed chairs nearly always step down at the end of their term, unless they’re reappointed, especially as their successor prepares to take the reins.
The incumbent Fed chair, however, has decided to stick around — for now.
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That’s not what Donald Trump, who has spent the entirety of his second term publicly and privately raging against Powell, wanted to hear, but the irony is that the president is directly responsible for the surprising announcement. CNBC reported:
Federal Reserve Chair Jerome Powell on Wednesday said he will stay on the Board of Governors for an indefinite period while a probe into the renovation of the central bank’s headquarters continues.
“I’ve 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. I’m encouraged by recent developments, and I’m watching the remaining steps in this process carefully,” Powell said near the beginning of his post-meeting news conference.
In other words, the White House launched a legal, political and procedural fight, and Powell feels compelled to stick around until that fight has been fully resolved, even as Senate Republicans prepare to confirm Kevin Warsh as his successor. (A Trump-backed criminal case against the Fed chair collapsed late last week.)
Time will tell what, if anything, the president has to say about this, but let’s not forget that just two weeks ago, Trump told Fox Business’ Maria Bartiromo that he will “have to fire” Powell if the Fed chair does not step down.
It’s not at all clear that the president has that authority, should he try to exercise it. Watch this space.
Steve Benen is a producer for "The Rachel Maddow Show," the editor of MaddowBlog and an MS NOW political contributor. He's also the bestselling author of "Ministry of Truth: Democracy, Reality, and the Republicans' War on the Recent Past."
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