Powell to remain on Fed Board after chair term ends

Jerome Powell will remain on the Fed Board as governor after his chair term ends, citing legal and political pressures. His move aims to protect Fed independence and impacts market sentiment.

Jerome Powell announced he will remain on the Federal Reserve Board as a governor after his term as chair ends in May. He cited ongoing legal and political pressures as the main reasons for his decision, emphasizing that these challenges threaten the independence of the Federal Reserve. Powell originally intended to step down and maintain a low profile but felt compelled to stay to safeguard the institution. This move breaks with tradition and prevents the current administration from gaining a majority on the Board, as Powell’s seat would otherwise be filled by a new appointee. The Federal Reserve recently kept interest rates steady at 3.5%-3.75%. Powell’s announcement added tension to already sensitive markets, with risk assets like bitcoin reacting negatively. Market participants are closely watching for further developments, including possible changes in administration rhetoric or Senate actions, which could influence the timeline of Powell’s eventual departure and the broader narrative around central bank independence.