Jerome Powell's Term as Fed Chair Ends; Continues as Governor
Jerome Powell concluded his eight-year tenure as Federal Reserve Chair with a final policy meeting where rates remained unchanged. He announced he will stay on as a governor until a Department of Justice probe into his actions is resolved. The decision comes amid past clashes with President Trump over central bank independence.
upi.comJerome Powell held his final Federal Reserve policy meeting as chair on Wednesday, leaving interest rates unchanged for the third straight meeting amid higher energy costs. Powell stated he will remain on the Fed's rate-setting committee as a governor after his chair term ends on May 15.
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He cited the need to stay until a recently closed Department of Justice probe into his actions is resolved with transparency and finality.
Powell served as Fed chair for eight years, spanning three administrations and handling 66 interest-rate-setting meetings. During the pandemic, he convened an emergency meeting on March 3, 2020, cutting rates by half a percentage point. Less than two weeks later, on a Sunday, the Fed held another emergency meeting and lowered rates by a full percentage point to near-zero levels.
Powell noted that economies worldwide came to a hard stop and critical financial markets were near collapse.
“We do recognize that a rate cut will not reduce the rate of infection. It won’t fix a broken supply chain. We get that. In November 2021, Powell told senators it was time to retire the term transitory. The Fed raised rates by a quarter-point three months later, but inflation hit a 40-year high, prompting aggressive hikes. In August 2022, Powell warned of some pain for households and businesses from higher borrowing costs, leading to a 1,000-point drop in the Dow Jones Industrial Average. Trump nominated Powell in November 2017, calling him strong, committed, and smart. Relations soured as rates rose, with Trump criticizing Powell and labeling him with insults such as Mr. Too Late, a complete moron, and numbskull.”
A Department of Justice criminal investigation into Powell over congressional testimony on a Fed renovation project prompted him to issue a video statement. Powell said the issue was whether the Fed could set rates based on evidence or under political pressure.
