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Federal Reserve Chair Jerome Powell is set to deliver what is expected to be his final news conference as head of the Fed on Wednesday.
The end of his chairmanship next month, however, may not mark his departure from the world’s most powerful central bank — and the circumstances are setting the scene for a standoff between Powell and President Donald Trump.
If Powell steps aside, it would open a seat for Trump to fill, giving him another opportunity to shape the Fed’s leadership. If he stays, he would retain influence over U.S. monetary policy, intensifying tensions with the president.
TRUMP VS THE FEDERAL RESERVE: HOW THE CLASH REACHED UNCHARTED TERRITORY
President Donald Trump speaks to Fed Chair Jerome Powell during a tour of the Federal Reserve construction site in Washington, D.C., on July 24, 2025. (Daniel Torok/Official White House Photo)
What began as a disagreement over interest rates has escalated into a broader confrontation between Powell and Trump, marking one of the most fraught periods of his eight years as Fed chair.
Trump has intensified his pressure campaign in recent months, publicly criticizing the Fed’s benchmark interest rate decisions and, at times, resorting to personal attacks.
Powell’s tenure at the central bank dates back to 2017, when he was selected by Trump to succeed Janet Yellen. He was reappointed to a second four-year term by President Joe Biden in 2022, which expires on May 15. However, his underlying term as a Fed governor runs longer, allowing him to remain at the central bank until 2028.
In March, Powell told reporters he had not decided on his next steps and declined to say whether he would remain on the Fed’s board after his term as chair ends.
Powell’s decision could now carry major implications for markets and policy — and further inflame those tensions.
ONE LITTLE-KNOWN MEETING HELPS DECIDE WHAT AMERICANS CAN AFFORD — AND WHAT THEY CAN’T
President Donald Trump tapped Jerome Powell to lead the Federal Reserve in 2017. (Al Drago/Bloomberg/Getty Images)
Attention is now turning to who will lead the Fed next. And at the same time, the Supreme Court is expected to weigh in on a case involving Fed Governor Lisa Cook, which could test the limits of presidential power over the central bank.
Trump has selected millionaire Kevin Warsh as Powell’s potential successor.
The contentious confirmation process had been delayed by a Justice Department investigation into Powell’s congressional testimony related to renovations of the Fed’s headquarters in Washington, D.C., which some lawmakers said needed to be resolved before moving forward.
Sen. Thom Tillis, R-N.C., called the DOJ investigation “bogus” and vowed to block Warsh’s nomination until it was dropped — even if he didn’t object to the quality of Trump’s pick.
THE ONE LINE IN WARSH’S TESTIMONY SIGNALING A BREAK FROM THE FED’S STATUS QUO
Kevin Warsh is a former Morgan Stanley banker and became the youngest member of the Fed’s Board of Governors in 2006. (Andrew Harnik/Getty Images)
With the investigation now closed, a Senate panel is expected to take up Warsh’s nomination, putting the former Morgan Stanley banker on track for a full Senate vote.
Like Powell, Warsh is not an economist by training, instead bringing a background in law and finance. He previously served on the Fed’s Board of Governors, becoming the youngest member in its history at age 35.
His potential return comes at a critical moment for the central bank.
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The question of leadership at the Fed comes as policymakers weigh persistent inflation, the economic impact of the war in Iran and a fragile global outlook ahead of the U.S. midterm elections.
