Will he stay or will he go? Powell is not saying whether he'll stay on Fed board when chair term ends

• Three Trump appointees currently sit on the seven-member Board of Governors; Powell's departure would immediately give Trump a majority
• The 1934 Banking Act appears to give a board majority the power to fire individual bank presidents who oppose rate cuts
• Powell faces a personal vs. professional dilemma: ready for civilian life after 13 years but concerned about protecting Fed independence from unprecedented presidential pressure

Fed Chair Powell's Future Remains Uncertain as Term Approaches End

Federal Reserve Chair Jerome Powell continues to dodge questions about whether he'll remain on the Fed Board of Governors after his chairmanship ends in May 2026, despite having two years left on his governor term. This decision carries significant implications for Wall Street and monetary policy control.

Key Stakes:

• Three Trump appointees currently serve on the seven-member Board of Governors
• Powell's departure would immediately give President Trump a board majority
• Trump has repeatedly pressured the Fed for lower interest rates and stated nominees must agree with him

Historical Context:

Powell's situation is unprecedented in recent decades. Previous chairs like Bernanke and Yellen left the board entirely when their chairmanships ended. Only Marriner Eccles remained as governor after his chairmanship ended in 1948, playing a crucial role in establishing Fed independence through the 1951 Treasury-Fed accord.

Market Implications:

Fed watchers suggest Powell faces a personal versus professional dilemma. After 13 years at the Fed, including eight as chair, he may be ready for civilian life. However, concerns about preserving Fed independence under a president seeking unprecedented control over monetary policy could influence his decision.

The pending Supreme Court case regarding Fed Governor Lisa Cook (January 21 hearing) adds another variable. If Cook is removed amid mortgage fraud allegations, Trump would gain immediate board majority, potentially with broad authority to remove other governors.

Potential Scenarios:

• Most observers believe Powell will likely depart when his chairmanship ends
• Some speculate he might stay briefly to protect institutional independence
• His silence could be leveraging influence over Trump's nominee selections or simply asserting his legal right to decide independently

The decision's timing and outcome will significantly impact monetary policy direction and Fed independence in 2026.