- Key Insight: Federal Reserve Chair Jerome Powell acknowledged Wednesday that he may remain at the helm of the central bank past the end of his term because of delays in confirming his successor, and said he does not plan to leave while an investigation into him is ongoing.
- Expert quote: “I have no intention of leaving the board until the investigation is well and truly over, with transparency and finality.” — Fed Chair Jerome Powell
- Key Insight: An investigation by the Justice Department could keep Powell at his post indefinitely, even though his term is set to expire in May.
WASHINGTON — Federal Reserve Chair Jerome Powell said Wednesday that he intends to remain at his post until a successor has been confirmed and added that he would remain on the Fed board until a Justice Department investigation into him has concluded.
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Speaking during a post-Federal Open Market Committee press conference Wednesday afternoon, Powell said that he may remain in his role beyond the end of his term — which expires May 26 — if a successor has not been confirmed.
“That’s what the law calls for,” Powell said. “That’s what we’ve done on several occasions, including involving me, and that’s what we’re going to do in this situation.”
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Powell, whose term as a member of the board of governors runs through 2028, said he does not plan to leave while the investigation is ongoing.
“I have no intention of leaving the board until the investigation is well and truly over, with transparency and finality,” Powell said.
“No one is above the law, and this outrageous decision will be appealed by the United States Department of Justice,” said U.S. Attorney for the District of Columbia Jeanine Pirro following the ruling.
Powell declined to say whether he would serve out the remainder of his term as a governor.
“I have not made that decision yet,” he said. “I will make that decision based on what I think is best for the institution and the people we serve.”
On monetary policy, the Federal Open Market Committee voted overwhelmingly to keep interest rates unchanged. Federal Reserve Gov. Stephen Miran, who has pushed for substantial rate cuts since being confirmed in September, was the lone dissenter, favoring a quarter-point reduction.
The committee kept its target range for the federal funds rate at 3.5% to 3.75%, a decision that was widely expected as
At its January meeting, officials also left rates unchanged as they sought greater clarity on the economic outlook after three consecutive quarter-point cuts at the end of last year aimed at supporting the labor market.
Powell reiterated the Federal Reserve’s commitment to bringing inflation back to its 2% target, saying rate cuts will depend on continued progress.
“We should see some progress on inflation,” Powell said. “We should be seeing that. And the rate forecast is conditional on the performance of the economy. So if we don’t see that progress, then you won’t see the rate cut.”
Inflation eased to 2.4% in January, down from about 2.7% in prior months.
Recent labor market data has been less than instructive. Employers added 130,000 jobs in January, while 92,000 jobs were lost the following month. Powell
The Fed chair, however, cautioned that the outlook for inflation and the labor market remains uncertain going forward, particularly given emerging geopolitical risks.
He said the economic implications of tensions in the Middle East are unclear, noting that higher energy prices could push inflation higher in the short term, though it is uncertain whether those effects will persist.
“The thing I really want to emphasize [is], nobody knows,” Powell said. “The economic effects could be bigger. They could be smaller. We just don’t know.”