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

• Treasury Secretary Scott Bessent indicated Trump could nominate Powell's successor as chair as soon as next week, with prediction markets giving Powell a 70% chance of leaving his governor seat before August 2026
• Powell's potential decision to stay is influenced by Trump's threats to Fed independence, including public criticism, a DOJ subpoena Powell called 'pretext,' and Trump's statements that presidents should be consulted on interest rate decisions
• Other Fed governors including Michael Barr (term until 2032) and Philip Jefferson (term until 2036) may also choose to remain on the Board to counter political pressure, potentially giving Trump less control over Fed actions than anticipated

Summary: Jerome Powell's Potential Fed Tenure Beyond Chair Role

Key Development: Federal Reserve Chair Jerome Powell's term as chair ends May 15, 2026, but his 14-year governor term extends until January 31, 2028, raising questions about whether he'll remain on the Board after being replaced.

Historical Context: While outgoing Fed chairs typically resign their governor seats, Powell may break precedent—similar to Marriner Eccles in the 1940s—if he perceives serious threats to central bank independence.

Trump Administration Actions

• Treasury Secretary Scott Bessent indicated a new chair nomination could come as soon as next week
• President Trump has become increasingly vocal about controlling Fed policy and believes presidents should be consulted on interest rate decisions
• Recent developments include potential criminal prosecution of Powell and a related subpoena, which Powell called "pretext" for Trump's control efforts

Market Analysis

• Evercore ISI analysts believe recent events make it "much more likely" Powell and other governors stay beyond May
• Nomura economists see increased probability of Powell remaining as governor
• Prediction markets on Kalshi show 70% odds Powell leaves before August 2026

Additional Implications

• Fed Governor Michael Barr (term through 2032) and Vice Chair Philip Jefferson (term through 2036) may also choose to stay
• Senator Thom Tillis pledged to block Fed appointments until DOJ issues are resolved
• Market veteran Ed Yardeni suggests Trump's pressure could paradoxically strengthen Fed independence by hardening officials' positions

Powell has declined to comment on his post-chair plans.