Jerome Powell’s Decision to Stay at the Fed Draws Sharp Rebuke From Senate Banking Chair
Senate Banking Committee Chairman Sen. Tim Scott (R-S.C.) told the Milken Institute Global Conference Tuesday that Fed Chair Jerome Powell is committing a “significant mistake” by remaining on the Federal Reserve’s Board of Governors. CNBC reported Scott’s comments came just days before Powell’s chairmanship formally expires on May 15.
Scott Says Powell Is Breaking Decades of Precedent
Scott argued that every outgoing Fed chair over the past 75 years has departed the board entirely. He said overlapping leadership philosophies create unnecessary tension inside the institution. Scott told the conference he believes both the country and the central bank would be better served by a clean break. He added that Powell’s choice to stay appears to be a deliberate provocation toward President Donald Trump, saying it looks like Powell is “poking the president in the eye.”
Powell’s decision to linger on the board is consequential for a specific structural reason. By remaining, he prevents Trump from holding a majority of appointed governors. Powell could serve as a board member until 2028 if he chooses.
Background: A Year of Friction Between the White House and the Fed
The tension between Trump and Powell has escalated steadily over the past year. Trump has publicly called for lower interest rates on multiple occasions and at points floated the idea of removing Powell from his leadership role. The administration also launched an inquiry into cost overruns during renovations at the Fed’s Washington headquarters, along with scrutiny of testimony Powell gave Congress about those expenses.
After setbacks in federal court, U.S. Attorney Jeanine Pirro closed the criminal portion of the probe and referred it to the Fed’s own inspector general. Powell subsequently said he would not vacate the board until that process concludes with full transparency. He described recent developments as encouraging but said he is monitoring remaining steps carefully.
Warsh Nomination Advances as Senate Vote Looms
The resolution of the criminal inquiry removed a key obstacle for Trump’s preferred successor. Sen. Thom Tillis (R-N.C.) had blocked the nomination of Kevin Warsh as incoming Fed chair, insisting the probe be dropped first. After Pirro stood down, Tillis lifted his hold in April. The Senate Banking Committee then advanced Warsh’s nomination last week. A full Senate confirmation vote is now expected as early as next week, CNBC reported.
Scott himself had previously said he did not believe Powell acted criminally and had expressed hope in March that the investigation would be dropped entirely. A Federal Reserve spokesperson declined to comment on Scott’s Tuesday remarks.
Read Next: What Kevin Warsh’s Fed Nomination Means for Interest Rate Policy
