Fed Chair Jerome Powell said he’s staying put at the central bank even as officials voted 11–1 Wednesday to hold interest rates steady.
Powell confirmed he will stay on as a member of the Board of Governors after his term as chair expires May 15, extending his tenure at the Fed in defiance of efforts by President Donald Trump’s allies to pursue criminal charges over cost overruns tied to the central bank’s headquarters renovation.
“I’ve said that I will not leave the board until this investigation is well and truly over. With transparency and finality, and I stand by that,” Powell said Wednesday.
He acknowledged the decision marks a shift from his earlier plans to step aside.
“I had long planned to be retiring… [but] the things that have happened in really in the last three months… left me no choice but to stay and see them through at least that long,” Powell said.
Powell emphasized his continued role will be limited, saying, “After my term as chair ends on May fifteen, I will continue to serve as a governor for a period of time… I plan to keep a low profile as a governor.”
Policymakers kept the benchmark rate in the 3.5% to 3.75% range, but the decision masked growing fractures inside the central bank over whether borrowing costs should stay elevated or begin to fall in the months ahead.
Several officials objected to maintaining guidance that suggests rate cuts are more likely than hikes, while another dissented in the opposite direction and pushed for an immediate cut.
The Justice Department last week formally ended its criminal investigation into Powell, which had centered on whether he misled Congress about ballooning costs tied to the multibillion-dollar renovation of the central bank’s Washington headquarters.
US Attorney Jeanine Pirro said prosecutors were dropping the case and turning the matter over to the Fed’s inspector general, who will continue reviewing the project. She indicated a criminal probe could be reopened if new evidence emerges, but for now the case is closed.
The investigation had already faced skepticism in court, where a federal judge said prosecutors had produced virtually no evidence of wrongdoing when attempting to enforce subpoenas tied to the probe.
Sen. Thom Tillis (R-NC), a member of the powerful Senate Banking Committee, had been blocking a Senate vote on Kevin Warsh’s nomination to lead the Fed, calling the case against Powell “bogus” and insisting it be resolved before moving forward.
He pointed in part to lingering uncertainty around the Justice Department’s recently closed probe into the Fed’s headquarters renovation, noting authorities left open the possibility the case could be revived if new evidence emerges.
“My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors,” Powell told reporters in Washington, DC, on Wednesday after the decision on interest rates.
He added that the pressure goes beyond routine criticism from elected officials, calling the legal challenges “unprecedented in our one hundred and thirteen year history” and warning they are “battering the institution.”
Powell said it was “so important for our economy… that they can depend over time on a central bank that operates that way, free of political influence,” calling that independence “part of the absolute foundation of this amazing economy.”
“I’ve said that I will not leave the board until this investigation is well and truly over. With transparency and finality, and I stand by that,” Powell said.
