Fed’s Powell Refuses Exit After May 15 Despite Warsh Winning Senate Approval

Federal Reserve Chair Jerome Powell will stay in his post past May 15. He cited legal issues and other factors that have altered his previous plans to retire. At the press conference, which he deems his last, Fed’s Powell said that his exit will not be on a specific timetable.

Fed Chair Jerome Powell Denies Exit After May 15

“I had long planned to be retiring,” Powell said. He added, “The things that have happened really in the last three months have, I think, left me no choice but to stay until I see them through at least that long.”

In his statement, he suggests he will remain as long as it takes to deal with the issues being considered. He also acknowledged the nomination of Trump’s nominee Kevin Warsh, who just cleared the Senate vote today.

On Wednesday, April 29, the Senate Banking Committee advanced Warsh’s nomination with a 13-11 vote. “I want to congratulate Kevin Warsh on his advancement out of the Senate Banking Committee this morning,” Powell.

While his tenure as chair is coming to a close, Powell said he will remain on the Federal Reserve board. “I’ve said that I will not leave the board until this investigation is well and truly over with transparency and finality, and I stand by that,” he noted during the press conference.

However, U.S. President Donald Trump threatened to fire Powell if he doesn’t resign by May.

Decision On Interest Rates & Inflation Outlook

In terms of policy, the Federal Reserve left interest rates unchanged in a range of 3.5% to 3.75%. Meanwhile, four officials dissented on the move, the first time in decades the policymakers have been divided.

Powell also discussed inflation. He noted that PCE inflation is projected at 3.5% for March, while core PCE is at 3.2%. He said that short-term inflation expectations have increased, but long term expectations target 2%. Also, he noted that the odds for a rate hike and cut remain almost the same owing to surging inflation.

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