For the First Time in 70 Years: Will Powell Remain as Fed Governor?

On March 13, court documents related to the investigation of Federal Reserve Chair Jerome Powell revealed that Powell’s lawyers explicitly told the Department of Justice: if the criminal investigation is not concluded by the end of his term as Chair in May, Powell will not voluntarily resign from his position as a Federal Reserve Board member (term ending January 2028).

In January of this year, under the leadership of federal prosecutor Jeanine Pirro, the U.S. Department of Justice launched a criminal investigation into the $2.5 billion renovation project overruns at the Federal Reserve. On March 11, U.S. District Judge James Boasberg issued a clear ruling, dismissing the subpoenas against Powell due to lack of evidence of any crime and because the subpoenas appeared to be motivated by coercion. The prosecution then announced plans to appeal.

This also means the investigation will not conclude in the short term. According to court documents unsealed on March 13, Powell’s lawyers had already conveyed his intention to remain in office during a meeting with Prosecutor Pirro on January 29. If Powell stays on, it would break the usual precedent of departing Fed chairs leaving the Fed afterward. This would be a rare event in Fed history—only in 1948 did former Chair Marriner Eccles choose to stay on as a board member to resist Treasury Department interference—and it could significantly influence current U.S. macroeconomic policy directions and financial market expectations.

Personnel Deadlock and Market Expectation Reassessment

First, from an institutional perspective, Powell’s continued tenure would significantly increase the difficulty for former President Trump to intervene in the Federal Reserve’s personnel decisions. Powell’s term as a Board member is legally set to last until 2028, maintaining a seat on the Board and reducing the space for appointing a new Chair. This mechanism would serve as a systemic check on executive power.