Jerome Powell offers advice for next Fed chair, addresses his future at central bank

• Powell advised his successor to 'stay out of elected politics' and maintain democratic accountability through regular engagement with Congress
• The Fed held interest rates steady in January after cutting rates by 25 basis points at each of its final three meetings in 2024
• Leading contenders for Trump's Fed chair pick include former Fed Governor Kevin Warsh, NEC Director Kevin Hassett, Fed Governor Christopher Waller, and BlackRock's Rick Rieder

Summary:

Federal Reserve Chair Jerome Powell addressed his future at the central bank and offered guidance for his successor during a press conference following the Fed's decision to leave interest rates unchanged at its January meeting. The central bank maintained rates after implementing three consecutive 25-basis-point cuts in the final quarter of 2024.

Powell's term as Fed Chair expires in May 2026, though he could remain as a board governor until January 2028. When questioned about his plans, Powell declined to provide details, stating "I really once again have nothing for you on that today."

Key advice for his successor included:

• Avoid involvement in elected politics
• Maintain strong engagement with Congress as the Fed's window to democratic accountability
• Recognize the professionalism of Fed staff, calling them "the most qualified group of people you will ever work with"

Leadership speculation: President Donald Trump, who originally nominated Powell in 2017, has indicated he is close to announcing his pick for the next Fed Chair. Leading contenders include:

• Former Fed Governor Kevin Warsh
• National Economic Council Director Kevin Hassett
• BlackRock's chief investment officer of fixed income
• Fed Governor Christopher Waller

The context is particularly notable given Trump's previous pressure on Powell to cut interest rates and a recent DOJ criminal probe into Powell's testimony regarding the Fed's headquarters renovation. Powell's emphasis on political independence appears pointed amid these tensions.