Will Powell Stay or Will He Go?
Wednesday could be one of the most consequential days in the Federal Reserve’s recent history. Jerome Powell will hold his final press conference as chairman. The Senate Banking Committee is expected to vote on Kevin Warsh’s nomination to replace him. And the Supreme Court is scheduled to be in session and issuing opinions—meaning the long-awaited decision in Trump v. Cook, argued back in January, could land the same day.
The Wall Street Journal‘s Nick Timiraos, who understands the inner workings of the Fed better than any journalist in Washington, laid out the stay-or-go dilemma over the weekend. Powell set a test in March, saying the criminal investigation into him needed to be “well and truly over, with transparency and finality” before he could consider stepping down. U.S. Attorney Jeanine Pirro’s Friday announcement that her office would drop the probe—while reserving the right to reopen it—may or may not meet that threshold. Powell described it as a minimum condition, not a sufficient one.
Senator Thom Tillis (R-NC), whose holdout had frozen the Banking Committee, said Sunday that he was satisfied the investigation was closed. The committee is expected to vote on Wednesday to advance Warsh, and a floor vote before Powell’s May 15 term expiration is now realistic. Warsh should be the next chairman of the Federal Reserve.
Kevin Warsh is sworn in during a Senate Banking, Housing, and Urban Affairs Committee confirmation hearing on April 21, 2026, in Washington, DC. (Chen Mengtong/Getty Images)
Powell probably will not want to argue whether Pirro’s closure is final enough. Tillis is satisfied, which may indicate Powell has privately said the same. Short of an acquittal at trial or a presidential pardon—which Powell does not want from Trump—no law enforcement investigation is ever truly resolved with finality. New evidence of wrongdoing can always reopen a closed case.
But the succession drama does not end with Warsh’s confirmation. It may just be beginning.
It Might All Depend on What’s Cooking at the Supreme Court
The press corps has treated Powell’s decision as a binary question in isolation. It is not. The Supreme Court’s still-pending decision in Trump v. Cook is the hidden variable.
The Court heard oral arguments in January and appeared deeply skeptical of the administration’s attempt to remove Lisa Cook. Justice Kavanaugh warned that the government’s position would “weaken, if not shatter, the independence of the Federal Reserve.” The case has been fully briefed and argued for three months now—well within the normal window for a decision—and it is the kind of high-profile case the Court tends to resolve before its term winds down.
Formal group photograph of the Supreme Court of the United States in 2022. Seated from left are Justices Sonia Sotomayor, Clarence Thomas, Chief Justice John G. Roberts, Jr., and Justices Samuel A. Alito and Elena Kagan. Standing from left are Justices Amy Coney Barrett, Neil M. Gorsuch, Brett M. Kavanaugh, and Ketanji Brown Jackson. (Fred Schilling/Collection of the Supreme Court of the United States)
If the Court rules for Cook—holding that the president cannot remove a governor without a stronger showing of cause than the mortgage fraud allegations offered as grounds—Powell would know his seat is legally fortified. The precedent itself would do the institutional protection work that his physical presence on the board was meant to provide, and he could step down in peace.
But if the Court gives the president wider latitude to define “cause” or if it limits judicial review of removals, the calculus flips. With Warsh confirmed, Trump will have three appointees on the seven-member board: Warsh, Waller, and Bowman. Governor Miran loses his seat when Warsh is confirmed. If Cook is also removed and Powell leaves, Trump will be able to fill five of the board’s seven seats.
That still would not give Trump control over monetary policy. Despite Democrat complaints, Warsh, Waller, and Bowman are independent thinkers. And Trump appointees would remain a minority on the 12-member Federal Open Market Committee (FOMC), which includes two Biden-appointed governors, the New York Fed president, and four regional presidents appointed by their local boards. But Powell likely wants to wait for the Cook ruling before committing. The Court may not oblige him before May 15, but Wednesday is a live possibility.
Game of Monetary Thrones
There is a more unconventional play. Powell could announce that he intends to remain until a successor to his governor seat is nominated and confirmed—conditioning his departure on the quality of his replacement. Once he says he’s leaving, his leverage evaporates. If he holds the seat, the administration must either nominate someone credible or engage in a standoff that markets will not enjoy.
This power play would invite exactly the confrontation that leads to our final consideration.
Federal Reserve Chairman Jerome Powell answers reporters’ questions at the FOMC press conference on January 28, 2026. (Federal Reserve via Flickr)
A decision to stay could prompt Trump to try to remove Powell. Governors can only be removed “for cause,” but the Federal Reserve Act does not define cause, does not specify who determines it, and establishes no procedure for removal. Many expected the Court to quickly knock down Trump’s attempt to remove Cook, but no ruling has come. That suggests the issue is more complex—and Trump’s position stronger—than many Fed watchers assumed.
If Powell stays and Trump moves to oust him, the legal fight could produce a ruling worse for Fed independence than anything Powell was trying to prevent. The Court might hold that “cause” is broad or that the president’s determination is unreviewable. In which case, Powell would have stayed to protect the institution and ended up providing the vehicle for its legal debasement. That is the nightmare scenario—and Powell, a lawyer by training, has to weigh it against the possibility that leaving quietly concedes the same ground without a fight.
The Fed is expected to hold rates steady at 3.50 to 3.75 percent. The rate decision will be the least interesting thing that happens on Wednesday. The real drama is whether Powell, in his final appearance behind the Fed’s lectern, will give any indication of what he intends to do with the 18 months remaining on his governor term—and whether the Supreme Court, on the very same day, hands him the information he needs to decide.
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