WTF is Going On at The FED?

0:00 – 9:00

The Chairman Who Won't Leave

Picture this: Jerome Powell's term as Fed chairman expires in 14 days, but he's sitting in his office with no intention of leaving. Not because he wants to cling to power, but because until 48 hours ago, the Department of Justice was investigating him for a $2.5 billion cost overrun on the Fed's headquarters renovation. The investigation was transparently political, designed to pressure Powell into cutting interest rates faster. But here's the bureaucratic twist that makes this fascinating: Powell's chairmanship expires, sure, but his seat on the Board of Governors doesn't end until 2028. This matters because the Fed chairman isn't a dictator. They're more like a first among equals on a seven-person board. Each governor gets one vote on interest rates. The chairman runs meetings and does press conferences, but they can be outvoted by the other six people in the room. Federal law sets exactly seven seats on this board, no more, no less. So if Powell refuses to vacate his governor seat, there's literally no chair for Kevin Warsh to sit in, even if the Senate confirms him unanimously. Historically, outgoing chairmen have stepped down gracefully to make room for their replacement. But Powell was under criminal investigation for actions he allegedly took as Fed chairman. Staying on the board means keeping access to the records and institutional protection he'd need to defend himself. The DOJ just dropped the investigation, likely to smooth Warsh's confirmation. But Powell has already said he intends to stay on the board anyway, at least until the matter is "fully resolved." Translation: he's not going anywhere voluntarily, and there's nothing the White House can legally do to force him out before 2028.