economy
Will he stay or will he go? With criminal probe over, Fed Chair Powell faces big decision
The decision could have important ramifications for policymaking at an especially delicate time.
TL;DR
- The Justice Department has referred a criminal probe into Fed headquarters renovations to the Fed's inspector general.
- Fed Chair Jerome Powell vowed to stay until the probe is resolved and now faces a decision on his future at the institution.
- Powell must choose between following precedent by leaving or staying on as a governor for the remainder of his term.
- President Trump has previously threatened to fire Powell if he did not leave on his own after his term as chair.
- There are concerns about political interference at the Fed, with Trump actively pressuring the central bank.
- Kevin Warsh, Powell's potential successor, has been criticized as a Trump loyalist, and his confirmation hearing has been delayed.
- Some analysts believe Powell may stay to avoid the appearance of leaving under pressure and to safeguard the institution.
- If Powell leaves, Trump could appoint more members to the Board of Governors, potentially giving him a majority.
- Market reactions to Powell's departure are mixed, with some believing it could lead to lower yields and higher prices.