Federal Reserve Chair Jerome Powell stuck mostly to form on Wednesday, deflecting questions from the press about both his future at the central bank and a criminal probe launched by the Trump administration, but he did offer some candid advice to whoever next fills his shoes.
“Stay out of elected politics, don’t get pulled into elected politics. Don’t do it,” Powell said at his regular press conference following the latest Fed monetary policy meeting.
This press conference, though, was anything but the typical back-and-forth over the outlook for the economy and interest rates, as Powell was peppered with questions about a Department of Justice investigation he revealed in an extraordinary video statement on Jan. 11.
Avoiding politics, though, doesn’t mean avoiding elected officials, he said.
“Our window into democratic accountability is Congress, and it’s not a passive burden for us to go to Congress and talk to people, it’s an affirmative regular obligation,” said Powell, who has made developing expansive relationships on Capitol Hill a priority over his eight years at the helm of the Fed. “If you want democratic legitimacy, you earn it by your interactions with our elected overseers.”
Still, Powell wouldn’t bite on repeated requests by reporters to elaborate on his video statement or to declare his intentions after his term as chair ends in May. His separate board seat term does not expire for two more years.
“I really, once again, have nothing for you on that today,” Powell said, a turn of phrase he would repeat several times over a more-than-45-minute press conference as reporters sought to draw him out about the DOJ probe into cost overruns for a renovation of the central bank’s headquarters and whether he plans to stay on at the Fed after his term as chair ends.
“There’s a time and place for these questions.”
Instead, Powell said when it comes to his comments Wednesday, “this is really about the press conference and the economy and what we did today” at the policy meeting.
At the meeting, Fed members voted to keep their interest rate target range steady at between 3.5% and 3.75%, as most had expected. Powell gave little guidance about what’s next for interest rate policy as markets look to the prospect of a June rate cut.
Succession
President Trump is currently weighing who he’ll select as next leader of the Fed. Having tapped Powell for the job early in his first term, Trump has nevertheless steadily attacked Powell and the Fed more broadly, arguing it should cut interest rates aggressively, even as inflation remains well above the 2% target.
Trump has made cutting rates a litmus test for his Fed chair pick, and many in markets worry that the next Fed leader could surrender the central bank’s statutory independence to the president.
Betting markets are eyeing BlackRock’s chief bond investment manager Rick Rieder as the leading contender to be Fed chair. Others in the running include White House economic adviser Kevin Hassett, Fed Governor Christopher Waller, and former Fed Governor Kevin Warsh.
In his attempts to increase his influence at the Fed, Trump has gone so far as to try to fire Governor Lisa Cook for alleged misstatements on mortgage applications before she was nominated to the Fed. Powell last week attended the Supreme Court arguments over the matter, even as Treasury Secretary Scott Bessent said it would be a mistake for him to do so.
Powell on Wednesday countered it would have been hard to explain why as Fed chair he would not attend.
“I would say that that case is perhaps the most important legal case in the Fed’s 113-year history,” he said. “And I, as I thought of that, I thought it might be hard to explain why I didn’t attend.”
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