Reuters: Powell akan tetap tinggal di Federal Reserve sebagai gubernur setelah masa jabatannya sebagai ketua berakhir, terlepas dari litigasi

Decryption of court files shows that in a meeting with the Department of Justice in January, Fed Chair Powell stated: if the criminal investigation continues, he will not leave his Federal Reserve Board seat after his term ends in May—this would break a historical precedent for the Fed. Reuters pointed out that these files reveal more than just a legal battle; they seem like Powell’s camp’s covert bargaining with the DOJ: only if the investigation is dropped can he consider stepping down.

(Background: Powell admits to being under criminal investigation: because I refused Trump’s request to cut rates, I am targeted)

(Additional context: Powell once said, “Unless I die,” he will never resign early, the last bastion of Fed independence)

Table of Contents

Toggle

• Lawyer’s words: one sentence, two interpretations
• Court blocks subpoena, DOJ threatens appeal
• Political logic behind the renovation project

According to Reuters, a batch of court files declassified last Friday (March 14) shows that Powell’s private lawyer conveyed a cautious yet profound message to U.S. District Attorney Jeannine Pirro during a closed-door meeting on January 29: if the criminal investigation continues, even after Powell’s May chairmanship ends, he “will not leave the board.”

This file comes from a legal lawsuit where the Fed attempted to block a DOJ subpoena. The case’s core, on the surface, concerns the costs of the Washington headquarters renovation, but the entire legal battle has been interpreted as a symbol of political pressure.

Lawyer’s words: one sentence, two interpretations

The court files quote Powell’s lawyer: “The chairman believes that if he is still under investigation, he will not leave the board even after his term ends; and although he cannot say the opposite, if he is no longer facing criminal investigation, his image would change, and he would be free to make family-focused decisions.”

This statement appears to be a personal wish, but in the context of legal battles, its meaning is quite clear: only if the investigation is dropped can Powell resign as chairman and simultaneously step down from the board; if the investigation continues, he will remain on the Fed until his January 2028 term ends.

Typically, former Fed chairs do not continue to serve on the board after stepping down, so if this happens, it would be a rare precedent in Fed history. Notably, Treasury Secretary Scott Bessent publicly suggested Powell resign from the board at the end of his chairmanship, and this file indicates Powell’s camp’s response was “depends on the situation.”

Court blocks subpoena, DOJ threatens appeal

On the same day these files were declassified, District Judge James Boasberg ruled in favor of the Fed, blocking the DOJ’s subpoena. The ruling was direct, stating “the government, apart from angering the president, has provided no evidence of crime,” implying the investigation lacks substantial criminal grounds.

The DOJ announced plans to appeal, and the battle will continue. Meanwhile, Republican Senator Thom Tillis (a member of the Senate Banking Committee) also increased political pressure, threatening to block Powell’s successor’s confirmation vote in the Senate until the investigation is withdrawn—meaning if the DOJ’s appeal drags on, the Fed’s leadership succession could face a vacuum.

Political logic behind the renovation project

The official reason for the DOJ investigation is the costs of the Washington headquarters renovation, but Powell has publicly exposed the background: he links this investigation directly to his repeated refusal of Trump’s rate-cutting requests, viewing it as political retaliation rather than genuine criminal inquiry.

Powell’s term as chair will end on May 15, 2026, with board members’ terms extending to January 2028. If the DOJ’s appeal becomes a protracted stalemate, combined with Republican senators blocking nominations, the uncertainty over Fed leadership could persist for months, impacting market confidence and policy stability.