Tim Scott Slams Jerome Powell for Staying on the Fed Board

Senate Banking Committee Chair Sen. Tim Scott told the Milken Institute Global Conference Tuesday that Fed Chair Jerome Powell is making a “significant mistake” by staying on the Federal Reserve board after his chairmanship ends, CNBC reported.

Scott Breaks With Powell on Board Tenure

Powell’s four-year term as Fed chair expires May 15. Rather than departing the institution entirely, Powell has opted to remain as a board member, a seat he can hold until 2028. Scott argued that move breaks with roughly 75 years of established practice, in which outgoing chairs have traditionally stepped away from the board altogether. The South Carolina Republican said competing policy philosophies within the same board would not serve the country or the central bank well. Scott added that Powell appeared to be “poking the president in the eye” with the decision.

A Tense Backdrop for the Handover

The dispute does not arise in a vacuum. Powell and President Donald Trump have been at loggerheads for over a year. Trump has repeatedly pressed the Fed to cut interest rates and at one point floated the idea of removing Powell before his term concluded. The White House subsequently launched a probe into cost overruns during renovations at the Fed’s Washington headquarters, questioning testimony Powell gave to Congress on the matter. Powell stated publicly last week that he would not vacate his board seat until the investigation reached a transparent and final resolution. He noted he is watching remaining procedural steps closely.

Criminal Probe Drops, Warsh Advances

The investigation took a significant turn when U.S. Attorney Jeanine Pirro dropped her criminal inquiry into Powell and referred the matter to the Fed’s own inspector general. That shift removed a key obstacle for Powell’s designated successor, Kevin Warsh. Sen. Thom Tillis of North Carolina had withheld support for Warsh’s nomination until the criminal probe was shelved. After Pirro’s referral, Tillis ended his block in April. The Senate Banking Committee advanced Warsh’s nomination last week. The full Senate could hold a confirmation vote as early as next week. Scott himself had previously said he did not believe Powell committed any criminal act. By remaining on the board, Powell denies Trump an outright majority among the Fed’s seven governors, preserving his influence over the institution even after formal leadership changes hands.

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