Calling it a “violation of all Federal Reserve norms,” Scott Bessent has sharply criticized Jerome Powell for choosing to remain on the board of the Federal Reserve after stepping down as chair. Bessent's remarks, made in a television interview with Fox News, frame what would otherwise be a routine leadership transition as an institutional flashpoint. “It's highly unusual,” he said, questioning Powell's commitment to long-standing central bank conventions.
Earlier in the day, Powell confirmed that he will continue serving as a governor for an unspecified period after his term as chair ends on May 15, once Kevin Warsh—nominated by Donald Trump—is confirmed and sworn in.
The decision marks a clear departure from modern Fed practice, where outgoing chairs typically step away entirely. The last time such a move occurred was under Marriner Eccles, who remained on the board after his chairmanship ended in the late 1940s. Powell cited ongoing legal and political pressures, including scrutiny tied to a Federal Reserve building renovation project, as key reasons for staying on.
“Insult” to Incoming Leadership?
Bessent escalated his criticism by arguing that Powell's continued presence could undermine incoming leadership. He described the move as an “insult” to Warsh, as well as fellow governors Michelle Bowman and Christopher Waller. The concern, implicitly, is that Powell's institutional weight—even in a diminished role—could complicate the authority of the next chair at a delicate moment for monetary policy.
Powell, for his part, pushed back against suggestions that he could act as a shadow leader within the Fed. “There is only ever one chair,” he said, emphasizing that Warsh will fully assume leadership once confirmed. He added that he intends to keep a “low profile” and is not looking to emerge as a dissenting voice.
Powell's term as a Fed governor runs until 2028, allowing him to remain part of the policymaking framework even after relinquishing the top role.
The transition is unfolding against a backdrop of intensifying political scrutiny. Trump has repeatedly criticized Powell's policy stance and renewed his attacks following the announcement.
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