Powell in a surprising decision: I will remain at the Federal Reserve after the end of my term economy

Federal Reserve Chairman Jerome Powell said on Wednesday that he will continue his work within the central bank after the end of his term as president on May 15, in an unusual development in the institution’s traditions.

Powell explained, during a press conference following the Open Market Committee meeting, that he intends to remain as a member of the Board of Governors for a period that will be determined later, stressing that he will not leave his position before the legal issues related to the bank are resolved completely and transparently.

He added that his continuation aims to ensure the stability of the institution in light of the legal and political pressures it faces, indicating that he will maintain a limited role and will not seek to influence the direction of monetary policy after the appointment of his successor.

The head of the most powerful central bank in the world indicated that he intends to maintain media silence during his work after the end of his term at the head of the Federal Reserve.

Powell can legally remain a member of the Federal Reserve Board of Governors until January 2028, because his term on the Board is separate from his term as president.

Staying is legally possible

According to what was reported by the American newspaper “The Wall Street Journal”, Powell can legally remain a member of the Federal Reserve Board of Governors until January 2028, given that his term on the Board is separate from his term as president.

Powell’s stay on the Board of Governors is an exceptional step, as it is customary for Federal Reserve presidents to leave their positions completely after the end of their term, which reflects the sensitivity of the stage that the institution is going through in light of the economic and geopolitical tensions.

Although this scenario rarely materializes, historical precedents indicate a similar situation, as Mariner Eccles continued to serve as a member of the Federal Reserve Board between 1948 and 1951 after the end of his term as Chairman, according to the Brookings Institute.

This comes at a time when Kevin Warsh is preparing to assume the presidency of the Federal Reserve, pending final approval by the Senate, amid a division within monetary policy makers regarding the path of interest rates.

Earlier today, the Senate Banking Committee approved the appointment of Kevin Warsh as Chairman of the Federal Reserve to succeed Jerome Powell, after a vote of 13 to 11, with all Republican senators voting in favor of the appointment, while Democrats opposed it.