Powell is not planning to leave the Fed Board after his term as chair ends on May 15, 2026. The Justice Department investigation is still ongoing, and as long as it continues, he will remain in place.
As a result, he will stay on the Board at least until January 2028. This automatically removes an important option for Trump. The vacant seat could have been filled with his own candidate, bringing him closer to controlling rate vote outcomes.
Powell Remains at the Fed as a Board Member
Powell announced this at his last press conference as Fed chair. Initially, he really was planning to leave after his term, but the situation changed, partly due to pressure from the Trump administration.
See Also: DeFi Raises Over $300 Million to Support Aave Users After Kelp DAO Hack
In the end, he decided to stay on the Board of Governors at least until the Justice Department investigation is completed.
At the same time, Powell immediately dismissed talk that he would act as a “shadow chair” while remaining at the Fed:
“I am not going to play the role of a ‘shadow chair.’ I plan to be a constructive participant on the board,” he said.
In closing, Powell congratulated Kevin Warsh, Trump’s nominee, who is expected to become Fed chair on May 15.
Trump Loses Chance for a Fed Board Majority
Currently, three seats on the Board of Governors are already held by candidates appointed by Donald Trump during his previous presidential term. If Jerome Powell had left his post, the administration would have had an opportunity for another appointment.
In that case, Trump could have gained a fourth ally and effectively formed a working majority for FOMC votes.
However, Powell’s decision to stay until January 2028 closes that scenario. Trump will still be able to appoint Kevin Warsh as chair, but the overall vote balance on the FOMC remains unchanged for now.
Powell himself is a unique figure in this sense: he has been promoted by presidents from both parties. He was first nominated by Barack Obama, then became Fed chair under Donald Trump, and was later reappointed by Joe Biden.
At the same time, Trump already has support on the board, as he previously appointed Michelle Bowman and Christopher Waller. If Kevin Warsh joins them, the balance of power could shift significantly.
Because of this, Powell’s decision is interpreted in different ways. Some see it as an attempt to maintain balance, while others consider it a careful and calculated move that slows down changes in rate-cutting policy.
Warsh Moves Forward, Markets Await Faster Rate Cuts
Kevin Warsh took another step toward appointment: the Senate Banking Committee approved his nomination by a margin of 13 to 11 votes. The matter now goes to a full Senate vote before the transition of authority on May 15.
See Also: Bitcoin ETFs See Outflows After Series of Inflows, Price Fails to Hold $77,000
Donald Trump nominated Warsh with a focus on lowering interest rates, and this stance has already received a positive response in the crypto market in recent weeks.
Powell also made it clear that there is no unified view within the Fed on next steps. In his assessment, those who expect rate hikes and those who expect cuts are almost evenly split.
This situation complicates the scenario for a rapid policy easing, which Trump’s team is pushing for.
Answering a question about Kevin Warsh, Powell emphasized:
“I take his words seriously.”
The further dynamics will depend on votes within the board. These will show how quickly the regulator can move to rate cuts.
The first FOMC meeting under Warsh‘s leadership will be a key moment and will show whether the new chair can gather enough support for the course the administration is counting on.
