Powell's Fed Chair Term Ends; Warsh Confirmed
SkimNews Take
The transition of Fed leadership amid a major geopolitical development suggests that the central bank's independence, while formally maintained, is increasingly perceived through the lens of political influence.
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- Jerome Powell's second four-year term as Fed chair ended Friday, with Kevin Warsh confirmed by the Senate two days earlier as the bank's next chief.
- Powell, 72, said at his final press conference that he had "no choice but to stay" on the Fed board — his separate 14-year term runs until January 2028 — until the bank had fought off the Trump administration's attacks on its independence.
- The Justice Department opened a criminal investigation into Powell in December, probing his handling of renovations to the Fed's Washington, D.C., headquarters and his Senate testimony about the matter.
- Sen. Thom Tillis (R-N.C.) blocked all Trump Fed nominees from reaching the Senate floor until the probe concluded, lifting the blockade after U.S. Attorney Jeanine Pirro referred the investigation to the Fed's own inspector general.
- Treasury Secretary Scott Bessent and Senate Banking Chair Tim Scott criticized Powell for breaking with precedent by remaining on the board — a position Capital Alpha's Ian Katz said actually validates Powell's decision, calling the Trump administration's attacks on the Fed "unprecedented."
- Warsh received unanimous support from Republican senators, unlike several of Trump's first-term Fed nominees; the early resignation of former board member Adriana Kugler gave Trump additional flexibility to shape the bank after Powell's departure.
Why it matters: Powell is handing the Fed's top job to a unanimously confirmed successor while staying on the board as a guardrail through January 2028, keeping the fight over the institution's independence alive long after the chairmanship changes hands. The unprecedented moves Bessent and Scott are reacting to — the DOJ probe of Powell and the attempt to fire Governor Lisa Cook — mean the Fed enters its new era with its political defenses actively stressed rather than settled.
