Jerome Powell could stay at the Fed even after being removed as chair. Here's what that means

Core Viewpoint - The Federal Reserve has lowered interest rates by a quarter of a percentage point to a range of 3.5% to 3.75%, marking the third rate cut of the year, amidst ongoing speculation about the future leadership of the Fed under President Trump's influence [1]. Group 1: Leadership Changes - Jerome Powell's term as Fed Chair ends on May 15, and it is likely that President Trump will nominate a successor before that date [2]. - Powell's 14-year term as a governor extends until January 31, 2028, which may influence his decision to remain in his role [2]. - Historical precedent suggests that outgoing Fed chairs typically leave their governor roles, but Powell may choose to stay if he perceives threats to the Fed's independence [3]. Group 2: Political Influence - President Trump has been increasingly vocal about his desire to control the Fed, criticizing Powell and advocating for presidential consultation on interest rate decisions [4]. - Speculation exists that Trump's potential further control over the Fed Board of Governors could motivate Powell to remain in his position [5]. - The Justice Department's investigation into Powell has intensified speculation regarding his future, with Powell labeling the related subpoena as a "pretext" for Trump's influence [5]. Group 3: Other Fed Officials - Krishna Guha from Evercore ISI suggests that the current political climate makes it more likely that Powell and other Fed officials, such as Governor Michael Barr, will stay on after May [6]. - Barr's term extends to 2032, but there were discussions about his potential departure, especially after he left his supervisory role to avoid being replaced by Trump [7]. - Philip Jefferson, vice chair of the Federal Open Market Committee, also faces a decision regarding his position, which does not expire until January 2036 [8].