Jerome Powell Just Refused to Leave the Federal Reserve. He Also Quietly Blamed Trump for the Inflation Crushing American Consumers.
The big picture: Federal Reserve Chair Jerome Powell announced he will stay on the Fed’s governing board after his term as chair ends May 15th, becoming the first departing Fed chair since 1948 to do so. The move denies Trump a majority on the seven-member board. In his final press conference as chair, Powell laid out that current U.S. inflation is being driven by two specific things: the Iran war’s effect on oil prices and Trump’s tariffs. He didn’t name Trump once. The economics speak for themselves.
Why it matters: This is one of the most public defenses of central bank independence in modern U.S. history. Trump has spent months trying to break the Fed’s autonomy through legal pressure, public attacks, and personnel changes. Powell just refused to give him the win.
The math
The Fed has 7 governors. Trump has 3 appointees. He needs 4 for a working majority. One of his appointees is leaving when Trump’s nominee Kevin Warsh becomes chair, so without Powell vacating, Trump still has only 3. By staying, Powell holds that 4th seat. His term as governor runs until January 2028.
The Pirro pressure
Last week, Trump’s D.C. prosecutor Jeanine Pirro dropped a criminal probe into Powell and the Fed but warned she “will not hesitate to restart a criminal investigation should the facts warrant doing so.” Powell’s response: “The series of legal attacks on the Fed... have, I think, left me no choice but to stay until I see them through.”
The inflation receipts
Powell at his press conference: March inflation was 3.5%, “boosted by the significant rise in global oil prices that has resulted from the conflict in the Middle East.” Core inflation 3.2%, which “largely reflects the effects of tariffs on prices in the goods sector.” Both attributable to direct Trump policy decisions. Powell named neither Trump nor the policies, just stated the facts.
The Fed dissent
The Fed kept rates steady but Powell signaled possible cuts later. 3 Fed officials disagreed with even floating cuts. 1 wanted to cut immediately. Officially the most internal disagreement at a Fed meeting since 1992.
The “two popes” risk
Concern that Kevin Warsh becomes nominal Fed chair while Powell remains de facto authority from his governor’s seat. Powell publicly downplayed this, saying he plans to keep a low profile.
Trump’s response
Truth Social: “Jerome ‘Too Late’ Powell wants to stay at the Fed because he can’t get a job anywhere else, nobody wants him.”
By the numbers
1948, the last time a departing Fed chair stayed on as governor
7, total Fed governors
4, the majority Trump needs but doesn’t have
January 2028, when Powell’s term as governor ends
3.5%, March headline inflation
3.2%, March core inflation
1992, the last time the Fed had this much internal dissent
The bottom line
The Fed’s independence has always rested on individuals being willing to hold the line under pressure. Powell just chose to. The next test is whether that line holds through what comes next, including whoever Trump nominates to fill the rest of the board.
Thanks for reading! Comment your thoughts & reactions | Share to spread the word | Follow to stay in the loop