Will he stay or will he go?
The anticipated drama coming out of the Federal Open Market Committee meeting April 29 is whether Fed Chair Jerome Powell is going to fish or cut bait.
Powell’s term as chair ends May 15.
Former Fed Governor Kevin Warsh, President Donald Trump’s nominee to succeed Powell, is expected to win approval from the Senate Banking Committee April 29, resulting in the full GOP-led Senate confirming Warsh prior to the May 15 date.
Historically, Fed chairs have left the central bank when their chair term expires. Powell’s term on the Board of Governors ends January 2028.
But Powell said last month that he would not step down in May unless a Department of Justice criminal investigation of him was “well and truly over, with transparency and finality.”
“Powell has absolutely earned a retirement at the time and of the nature of his choosing. He has given mightily to the country,” David Wilcox, a former senior Fed economist who worked with Powell, told The Wall Street Journal.
“But history has a habit of sometimes being cruel, and it has conspired to put him in a circumstance where he has to make a difficult decision,” Wilcox said.
DOJ probe focused on Fed headquarters renovation costs
The Justice Department said April 24 it would halt its criminal investigation of the Fed chair over allegations he lied to Congress about cost overruns of the $2.5 billion restoration of the central bank’s Washington, D.C., headquarters, The Wall Street Journal noted.
Powell and others called the unprecedented criminal probe of a sitting Fed Chair a “pretext” from the White House to force the Fed into drastically slashing the benchmark federal funds rate to 1% or below.
U.S. Attorney Jeanine Pirro, a longtime friend and ally of President Trump, said in an April 24 social media post that she had asked the Fed’s internal watchdog, the Office of Inspector General, to examine cost overruns in the $2.5 billion renovation of the Washington headquarters.
However, the Fed IG said in a statement following Pirro’s X post that it has been investigating the renovations since July 2025 and was looking forward to completing its review. CNBC reported that Powell had asked the IG to look into the cost overruns at that time.
A federal judge last month blocked two subpoenas from Pirro’s office to the Fed’s Board of Governors, Reuters confirmed. The judge found the subpoenas were issued for the improper purpose of pressuring Powell to cave to Trump’s demands to rapidly lower interest rates or resign.
Photo by Chip Somodevilla on Getty Images
Tillis vowed to block Warsh nomination
Pirro had vowed to appeal the ruling and to continue the investigation just one day after Warsh’s nomination hearing.
Retiring Republican Senator Thom Tillis repeated his vow during the hearing that he would block Trump’s pick unless the DOJ dropped its “bogus” investigation of Powell.
“Let’s get rid of this investigation, so I can support your confirmation,’’ Tillis told Warsh.
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Two days later, Pirro confirmed that the probe had ended. But the post added: “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.’’
That codicil sparked outrage from Senate Democrats and other political leaders.
Tillis clears path to Warsh nomination
Tillis said April 26 on NBC’s “Meet the Press” that he was ready to move forward on Warsh’s nomination after conversations with DOJ staff.
“They have made it very clear that the current investigation is completely and fully ended,” Tillis said, adding those discussions gave him the assurances he needed “to feel like they were not using the DOJ as a weapon to threaten the independence of the Fed.”
Blanche says Powell investigation is still pending
Acting Attorney General Todd Blanche signaled during the same “Meet the Press” program that the investigation was still active, pending the results of the Fed’s IG review.
Blanche’s comment suggests Powell’s threshold may not be satisfied, even if Tillis’ has been, Kurt Lewis, a former senior adviser to Powell who follows the central bank for Piper Sandler, told The Wall Street Journal.
Related: Markets reset Fed rate-cut bets as DOJ drops Powell probe
In a note to clients April 27, Lewis said the odds Powell remains on the board at least until full resolution have gone up as a result.
The Kalshi prediction market April 28 showed a 67% chance Powell would leave before August and 30% before June.
April 29 FOMC meeting could be Powell’s last as chair
The April 29 Federal Open Market Committee meeting is presumed to be Powell’s last as Fed chair.
There’s a 100% probability the FOMC will hold rates steady at 3.50% to 3.75%, according to the CME Group’s FedWatch Tool.
Powell’s comments during the press conference following the FOMC’s 2 p.m. statement will be his opportunity to address, or deflect, his immediate future plans.
It may also be the last post-FOMC press conference for a while.
Warsh has said he intends to bring “regime change” amid a tranche of reforms to Fed operations, including dropping the pressers.
“The question is how fast he will be able to change the Fed,” analysts at Evercore ISI wrote in a recent research note, Bloomberg reported. “This will depend in part on how fast the board and FOMC turn over — including whether Powell quits as governor.”
Related: Incoming Fed Chair Warsh’s rate cut path is on a collision course with White House