Trump has not yet announced who he will nominate to succeed Powell, whose term ends in May.
The outgoing chair of the Federal Reserve has shared guidance for his successor, reflecting in part the tense relationship with President Donald Trump that has defined his final months in the role. In a press conference following the central bank’s latest policy meeting, at which it left interest rates unchanged after three consecutive cuts, Jerome Powell was pressed on the current economic climate, the Fed’s approach to future policy decisions, as well as his own future once his term ends in May.
Asked what advice he would give to the next chair, Powell said: “Stay out of elected politics, don’t get pulled into elected politics. Don’t do it.“ Powell also urged the next chair to convene regularly with Congress—describing this as “our window into democratic accountability“, and said that, while criticizing government institutions is easy, “there isn’t a better cadre of professionals more dedicated to the public well-being than those who work at the Fed.“ Why It Matters The latter portion of Powell’s tenure has been marked by a historically fraught relationship between the Fed and the executive branch. Trump, who nominated Powell in 2017, has repeatedly criticized the central bank chief whenever it opted against rate cuts, while also threatening to fire him or bring legal action over what he has described as Powell’s “grossly incompetent“ handling of the D.C. renovations. This came to a head earlier this month, when the Department of Justice served the Fed with subpoenas and threatened a criminal indictment relating to Powell’s Senate testimony last June, and these ongoing renovations. Former Fed chairs and Powell himself said this was a politically motivated act, but Trump has denied any knowledge of or involvement in the move, which has heightened concerns about the independence of the central bank. What To Know In its first policy meeting of 2026, the Federal Reserve’s 12-member Open Market Committee decided to leave interest rates unchanged, with only two dissenters—Trump appointees Stephen Miran and Chris Waller—voting for a cut. “Recent indicators suggest that economic activity has continued to expand at a solid pace,“ it said in a statement. “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.“ In the subsequent press conference, Powell said that the U.S. economy was on a “firm footing,“ that monetary policy was “not on a preset course,“ and that rate decisions would be made on a “meeting-by-meeting basis.“ But many of the questions asked of Powell centered around threats to the Fed’s independence, in light of the new legal case against Powell as well as that involving Fed Governor Lisa Cook. Last August, President Trump announced that he was firing Cook “for cause“ over alleged mortgage fraud. Cook promptly sued the administration in federal court, and has remained in her post as the drawn-out battle unfolded—a dispute that has now ascended to the Supreme Court. Powell, who has stayed largely silent on the matter, described this as “perhaps the most important legal case in the Fed’s 113-year history“ on Wednesday, while defending his decision to attend oral arguments in a Supreme Court hearing last week. Treasury Secretary Scott Bessent had called Powell’s attendance a “real mistake“ and told CNBC last week this could be seen as the Fed chair putting “his thumb on the scale.“ Federal Reserve Chair Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting, Wednesday, Jan. 28, 2026, at the Federal Reserve Board Building in Washington. Trump has not yet announced who he will nominate to succeed Powell, whose term as chair ends on May 15. Early frontrunner’s included Kevin Hassett, currently director of the president’s National Economic Council, but bettors on the prediction markets Kalshi and Polymarket are now leaning toward Rick Rieder, chief investment officer of global fixed income at BlackRock. Darius Dale, founder of the independent research firm 42 Macro and a former colleague of Rieder’s, told Newsweek the executive was “by far the best candidate“ and would be capable of implementing “much-needed structural reforms at the Fed.“ However, Trump’s choice will be subject to Senate approval, and several lawmakers have said they will block whomever he nominates until the legal case brought against Powell by the DOJ is resolved. What People Are Saying Jerome Powell, during Wednesday’s press conference, said: “It’s easy to criticize government institutions in so many ways. I will tell whoever is, 'You’re about to meet the most qualified group of people you not only have ever worked with, you will ever work with.' And when you meet Fed staff—and not everybody’s perfect—but there isn’t a better cadre of professionals more dedicated to the public well-being than those who work at the Fed.“ What Happens Next The Fed has two more rate-setting meetings before Powell’s term ends. He is eligible to remain on the board through December 2028, thanks to his separate 14-year term as governor, though chairs typically resign before this point. Powell declined to comment on this possibility during Wednesday's press conference. Regarding his potential successor, Bessent told Yahoo Finance on Wednesday that Trump could announce a nomination “in the next week or so.“
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