Jerome Powell

The former Fed governor returns to lead monetary policy as inflation pressures persist.

The US Attorney closed the criminal investigation into Jerome Powell last Friday, three days before his likely final meeting as Fed Chair. Powell confirmed he will stay on the Board of Governors until the probe is "fully resolved," giving Kevin Warsh a clean handover around May 15th. The Fed held rates at 3.75% as CPI hit a two-year high of 3.3%, driven by Iran conflict energy costs. With GDP revised down to 0.5% in Q4, Powell faces classic stagflation dynamics on his way out. Markets have priced out any 2026 rate cuts.

US Attorney closed criminal probe into Fed Chair Powell last Friday; he stays on Board of Governors post-transition to Kevin Warsh around May 15th.

Trump publicly demanded Jerome Powell step down by May or face termination, escalating his war with the Federal Reserve before he even takes office. Powell's term runs until 2026, and Fed chairs have legal protections against political firing. The threat triggered a 0.3 percent dollar rally as traders bet on more aggressive pro-growth policies. Powell has already signaled he won't resign voluntarily, setting up the first constitutional test of Fed independence since the 1970s.