It could be a fable with a moral that Donald Trump would strongly dislike: by continually trying to push Jerome Powell out of the Federal Reserve (Fed), the president risks prolonging his career as a central banker.
The end of Powell’s term is approaching, but the arrival of the White House-appointed successor is stalling.
Here is an update on this extraordinary transition at the top of the central bank of the world’s largest economy.
Where do things stand?
In theory, Jerome Powell will preside over his final meeting on US interest rates in a month, on April 28 and 29. His term ends at the end of May.
He took over the Fed under Donald Trump’s first presidency and was renewed under Democrat Joe Biden.
Since his return to power in January 2025, the Republican has relentlessly criticized Powell, calling him “idiot”, “incompetent”, and “possibly dishonest”.
Donald Trump, who demands much lower interest rates, has tried tirelessly to oust him and push him to resign, without success.
The head of state even recently criticized the renovation cost of the Fed’s headquarters in Washington, which he denounces as $2.5 billion compared to the initial $1.9 billion.
The peak of this destabilization campaign was when a prosecutor close to Donald Trump, Jeanine Pirro, launched a legal procedure against these works.
Powell revealed this in January in a solemn speech and denounced it as a “pretext” to attack the Fed’s independence.
The announcement sparked a backlash from economic circles and some Republican officials.
Shortly after, the White House designated its candidate to replace Powell on January 30: former Fed governor Kevin Warsh.
What is causing the delay?
It is the Senate that has the power to confirm Kevin Warsh’s nomination, who the markets consider a credible candidate for the position.
The presidential majority is slim, allowing a Republican senator from North Carolina, Thom Tillis, to block the process.
Tillis swears to block the process until the legal procedure hanging over Jerome Powell is resolved.
A judge dismissed this procedure, seeing it as a way to “harass Mr. Powell”. Jeanine Pirro has vowed to appeal.
“This will only delay Kevin Warsh’s confirmation as a Fed governor,” warned Thom Tillis on March 13.
As long as Warsh is not confirmed, Powell can remain as president.
Even when his successor is in place, Powell could decide to stay on as a simple governor (his term as a governor only ends in early 2028).
Traditionally, the former chief leaves to avoid overshadowing the next one. But the situation is far from ordinary, and the US executive fears that Jerome Powell will cling to his seat to prevent Donald Trump from installing a loyalist.
To drive the point home, Powell recently stated that he will not leave the Fed until the legal procedure is “completely and definitively resolved, transparently”.
Published on March 29 at 4:17 PM by AFP.
