Following the (Fed’s) decision to once again keep interest rates unchanged, despite his pressure to lower them, the outgoing Fed chairman, , told reporters that he intends to remain on the Bank’s Board of Directors.
Powell, who is preparing to hand over the chairmanship to President-elect Kevin Warce next month, has said he plans to keep a “low profile” as a board member. It will be the first time since 1948 that a Fed chief remains governor after his term as chairman ends.
“I will step down when I feel the time is right,” Powell said.
What did he say about the government’s moves against him?
Powell expressed concern about “legal attacks” against the Fed, which he said threaten the bank’s ability to conduct monetary policy without political interference. The report concerned the criminal investigation opened against him by the US Department of Justice, which has since been suspended but could be reopened if deemed necessary.
“I have said that I will not step down from the Board until this investigation is fully, transparently and conclusively completed, and I stand by that,” he said.
“And I want to emphasize that this has nothing to do with verbal criticism from elected officials. I never said such criticism was a problem. What worries me are the government’s legal actions, which are unprecedented in our 113-year history and accompanied by threats of further action.”
Powell added that he fears these attacks undermine the institution’s independence and jeopardize its ability to conduct monetary policy without political criteria.
Where is Powell aiming with this announcement?
Typically, Fed chairmen step down completely at the end of their terms, but Powell’s departure comes after a particularly tumultuous period, with political pressure, a Justice Department investigation into renovations at Fed headquarters and continued scrutiny by independent authorities.
Despite this situation, Powell has tried to maintain an image of neutrality, even avoiding political symbolism in his public appearances, while he has repeatedly rejected pressure to cut interest rates.
The Fed makes decisions collectively, as the Board of Governors has 12 voting members. Powell, by remaining on the board, likely aims to continue to act as a counterweight to potential political interference, maintaining influence over the Bank’s future decisions.
