Published On 4/28/2026
Kevin Warsh is close to assuming the presidency of the Federal Reserve Board (the central bank) after the political and legal obstacles receded, but the scene has not yet been completely resolved, as attention is turning to a personal and political decision at the same time: Will the current Chairman of the US Federal Reserve, Jerome Powell, leave the Federal Reserve Board of Governors, or will he remain a member of it until the end of his term in January 2028?
The British Economist magazine believes that Warsh’s arrival at the helm of the Federal Reserve does not necessarily mean subjecting the central bank to the directions of US President Donald Trump or revolutionizing US monetary policy, because the head of the Fed is restricted by internal balances and collective voting mechanisms. While the American newspaper “Wall Street Journal” added that “the last big decision” within the Fed was in the hands of Jerome Powell alone.
The road was opened to Warash
The shift in the course of discussion of Warsh’s nomination in Congress came after the US Department of Justice announced a few days ago that it would stop the criminal investigation against Jerome Powell, a file that was considered a political pressure tool linked to the costs of renovating a federal building in Washington. The Wall Street Journal reported that Republican Senator Thom Tillis, who was blocking Warsh’s nomination, said that he had received assurances that the investigation had “effectively concluded,” which allowed the obstacle to Warsh’s confirmation to be removed before the end of Powell’s term as president on May 15.
According to The Economist, Warsh passed the test of political loyalty to the US President during the confirmation session in Congress, when he refused to say explicitly that Trump lost the 2020 presidential election to the then Democratic candidate, Joe Biden. Warsh also called for “regime change” within the central bank, a phrase that raised widespread concern within the legislative institution.
What can he do?
But the British magazine points out that many of Kevin Warsh’s ideas are either marginal, have limited impact, or require collective approval. He criticizes reliance on “core inflation” and prefers alternative indicators. He also wants to reduce the Federal Reserve’s budget amounting to about 7 trillion dollars, and questions the “future guidance” policy regarding the path of interest rates.
Core inflation is an economic indicator used to measure the pace of price increases, excluding goods that are characterized by severe and sudden fluctuations in their prices, which are often food and energy materials such as gasoline and electricity.
However, implementing these changes requires the vote of a majority of the Central Bank’s Board of Governors, which consists of 7 members, and interest policy decisions require the approval of 7 members out of 12 in the Open Market Committee within the bank. While Warsh has one vote and a powerful position, he does not have the power to decide alone.
The Economist adds that the markets, which had expected interest rates to be cut several times this year in the United States, are now tending to fix the interest rate between 3.5% and 3.75% after the war on Iran and the rise in energy and food prices.
Powell is between staying and leaving
The most sensitive issue now, according to the Wall Street Journal, is not Warsh but Jerome Powell. After the end of his presidency of the Federal Reserve, Powell can leave the Council, or remain in the Board of Governors until the year 2028. The man said last March that any decision to remain in this position requires that the criminal investigation be “completely concluded, transparently and once and for all.”
But the newspaper explained that this condition may not have been fully met, because the Ministry of Justice is still pursuing a limited legal appeal, and because the Federal Inspector General continues to review the costs of building the bank’s building. Kurt Lewis, a former advisor to Powell, said that the possibility of Powell remaining on the Council had increased after the recent developments.
Independence accounts
If Powell leaves the Board of Governors, President Trump will get an additional seat in addition to the seat allocated to Warsh, and if Powell remains, there will be no other vacancies on the Board before January 2028. Here, the Wall Street Journal believes that the issue goes beyond people to “mathematical calculations” within the Board.
Trump previously appointed Michelle Bowman and Christopher Waller to the Board of Governors, and if he also gets Powell’s seat, he may have a majority on the board. Former Fed official David Wilcox says, “The turning point comes when the president obtains a majority willing to dismantle the institutional structure.”
Imitation or confrontation?
Historically, most Fed chairs leave the institution after their term ends, but Jerome Powell’s stay may constitute a message of defense of the institution’s independence in the face of pressure from the White House. In contrast, its survival may be seen as a continuation of the political clash within the central bank.
The Wall Street Journal quoted Jared Bernstein, former head of the Council of Economic Advisers in the administration of former President Joe Biden, as saying that if Warsh is confirmed in his position, “he has the right to leave his mark,” and that the presence of the former head of the central bank within the interest committee is not an ideal institutional practice.
Between this opinion and that, Jerome Powell finds himself facing a difficult personal choice: to retire after 14 years within the Fed, including 8 years as president, or to remain to prevent the White House from expanding its influence within the most sensitive monetary institutions in the United States.
