Powell deflects questions on DOJ probe, offers advice to successor

Federal Reserve Chair Jerome Powell largely stuck to his usual script on Wednesday, sidestepping questions about both his future at the central bank and a criminal probe launched by the Trump administration, while offering general guidance to whoever eventually succeeds him, Reuters reported.

Powell’s regular post-policy press conference took an unusual turn, as reporters focused less on the economic outlook and more on a Department of Justice investigation that Powell disclosed earlier this month in a rare video statement. The probe relates to cost overruns tied to renovations at the Federal Reserve’s headquarters.

Rather than engaging in a detailed discussion of the investigation, Powell emphasised the importance of keeping the central bank separate from partisan politics, while maintaining strong working relationships with elected officials through Congress. He underscored that congressional engagement is a key mechanism for maintaining democratic accountability and institutional legitimacy.


Throughout the more than 45-minute session, Powell repeatedly declined to expand on the investigation or clarify his plans once his term as chair expires in May. His separate term as a member of the Fed’s Board of Governors extends for an additional two years, but he did not indicate whether he plans to remain at the central bank after stepping down as chair.

Powell said the focus of the day’s remarks should remain on the economy and the policy decisions made at the meeting.

At that meeting, Federal Reserve officials voted to keep the benchmark interest rate target range unchanged at 3.5% to 3.75%, a move that was widely expected. Powell offered limited guidance on the path ahead for interest rates, even as financial markets increasingly anticipate the possibility of a rate cut as early as June.

Succession and Political Pressure

US President Donald Trump is currently considering candidates to lead the Federal Reserve after Powell’s term ends. Although Trump initially appointed Powell early in his first term, he has since repeatedly criticized the Fed chair and called for aggressive interest rate cuts, despite inflation remaining above the central bank’s 2% target, according to the Reuters report.

Trump has made lower interest rates a key criterion for his next Fed chair selection, raising concerns in financial markets that the central bank’s independence could be weakened under new leadership. Betting markets are viewing BlackRock’s chief bond investment manager, Rick Riede,r as a leading contender, with other potential candidates including White House economic adviser Kevin Hassett, Fed Governor Christopher Waller, and former Fed Governor Kevin Warsh.

As part of his broader efforts to exert greater influence over the Federal Reserve, Trump has also sought to remove Fed Governor Lisa Cook over alleged misstatements related to mortgage applications before her nomination. Powell attended Supreme Court arguments on the matter last week, a move that drew criticism from Treasury Secretary Scott Bessent.

Powell indicated that the case was of exceptional importance to the institution, making it difficult for him, as chair, to justify not attending proceedings that could have far-reaching implications for the Fed’s structure and independence.