The Fed is expected to hold rates as Powell faces his final news conference
Forbes Media Chairman and Editor-in-Chief Steve Forbes discusses the Justice Department’s decision to close its investigation into Federal Reserve Chairman Jerome Powell on ‘The Bottom Line.’
The Federal Reserve will announce its latest interest rate on Wednesday when the Chairman of the Fed Jerome Powell he will hold what will likely be his last news conference as head of the central bank, and his term as chairman ends next month.
The Federal Open Market Committee (FOMC), the Fed’s panel responsible for interest rate movements, is widely expected to leave the federal funds rate unchanged at the current target range of 3.5% to 3.75% amid concerns about inflation rising above the Fed’s 2% target, which has risen since the start of the Iran war.
Powell’s term as chairman is due to end on May 15, although his term as a member of the Fed’s Board of Governors runs until Jan. 31, 2028. The next scheduled FOMC session after this week’s meeting is not until mid-June, after Powell’s term as chairman ends.
While Powell has indicated he is willing to stay on as Fed chairman for a while pending the confirmation of his successor, that may not be necessary after opening the confirmation process. The Federal Reserve Gov. Kevin Warsh after the controversial investigation into Powell was dropped, which would have allowed Warsh to begin his tenure as chairman at the June meeting.
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Federal Reserve Chairman Jerome Powell will host what is expected to be his final post-FOMC news conference on Wednesday. (Nathan Howard/Reuters)
There was uncertainty about whether the appointment of Powell’s successor would take place before the Fed’s June meeting because The Trump administration The Justice Department is investigating Powell’s testimony about the central bank’s expensive renovation project, as the probe has sparked the ire of a key congressman.
Sen. Thom TillisRN.C., who serves on the Senate Banking Committee that has jurisdiction over Warsh’s nomination, has vowed to block his confirmation despite supporting his nomination because of his concern that the administration was conducting a “bogus” investigation that undermined the central bank’s independence in monetary policy.
US Attorney for the District of Columbia Jeanine Pirro announced on Friday that he would close his office’s investigation into Powell’s Senate testimony on the Fed’s recovery, which has dealt with cost increases the central bank has attributed to rising commodity prices, asbestos abatement and other unexpected or higher-than-expected costs. Pirro said the Fed’s inspector general, Michael Horowitz, will take over the investigation.
Tillis said the DOJ investigation “is a serious threat to the Fed’s independence, and it needs to be completed before I can support the confirmation of Kevin Warsh,” adding that the inspector general’s investigation is a “necessary and appropriate step” that he hopes will be “conducted carefully and professionally.”
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Sen. Thom Tillis, RN.C., said the conclusion of the DOJ investigation would allow him to support Warsh’s nomination. (Nathan Posner/Anadolu via Getty Images)
As the way has been cleared for Warsh to be confirmed as chairman by the Senate soon, the focus will be on whether Powell intends to continue serving as a member of the Senate. The Board of Governors of the Fed after the end of his leadership.
While most central bank leaders have left the Fed at the end of their terms as chairman, Powell has not confirmed that he will follow that path and may stay on as governor.
In his press conference after the March FOMC meeting that left the rates unchanged, Powell said he “had no intention of leaving the board until the investigation was complete and transparent and concluded.”
“On the question of whether I will continue to be governor after the end of my term, and after the end of the investigation, I have not made that decision, and I will make that decision based on what I think is best for the institution and the people we serve,” added Powell. “I will never talk about those things again.”
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Former Treasury Governor Kevin Warsh, President Donald Trump’s nominee to be the next chairman of the Federal Reserve, is sworn in ahead of his confirmation hearing with the Senate Banking Committee on April 21, 2026. (Elizabeth Frantz/Reuters)
EY-Parthenon chief economist Gregory Daco said that although the DOJ has dropped its investigation, he expects Powell to “most likely not stay on the board,” explaining that “the reason is institutional continuity, not politics.”
Daco wrote that Warsh’s ideas of effects of inflation and the potential increase in productivity driven by artificial intelligence may not be profitable, and his views on how the Federal Reserve system works may compel Powell to stay to “help maintain the continuity of the institution, strengthen the existing communication system, and provide weight stabilization during the transition.”
“The reduction of the investigation reduces the pressure but does not eliminate it. The Inspector General’s review keeps the administrative inquiries active, and Powell remaining on the Board will not prevent the DOJ from reopening its investigation if new information comes to light,” added Daco.
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“For now, the combination of the cleared confirmation process, the likely transition in June, and the high likelihood that Powell will remain in place point to a continuation of the policy framework, as leadership evolves.”
