If the criminal investigation continues, Powell will remain as a Federal Reserve governor until January 2028.

How does Powell’s reappointment affect the independence of the Federal Reserve?

【Global Times Financial Comprehensive Report】According to newly unsealed court documents, Federal Reserve Chair Jerome Powell’s private lawyer reportedly sent a clear signal to federal prosecutors: if the criminal investigation against Powell continues, he will not voluntarily leave the Federal Reserve Board after his term ends in May, and his board seat can be retained until January 2028.

Dongfang IC

It is worth noting that, as a convention, outgoing chairs usually vacate their seats when their successors are sworn in. However, Powell’s statutory term as a Federal Reserve Board member extends until January 2028.

TD Cowen analyst said that, given the Department of Justice’s appeal and the government statements in the declassified documents, the likelihood of Powell remaining in office after May 15 has increased. RSM Chief Economist Joe Brusuelas stated that Powell’s extended tenure could reassure the markets. He emphasized that Federal Reserve independence is an essential condition for the modern U.S. economy, and weakening independence is not in America’s economic interests.

Additionally, the investigation stems from a hearing last June before the Senate Banking Committee, where Powell discussed the $2.5 billion Washington headquarters renovation budget overruns. By the end of 2025, the U.S. Attorney’s Office launched a grand jury investigation to determine whether the overruns constituted fraud and whether Powell made false statements to Congress.

On January 9 of this year, the U.S. Department of Justice served a subpoena to the Federal Reserve, threatening to bring criminal charges against Powell for testifying before the Senate Banking Committee in June 2025 about the Fed’s office building renovation project. According to CCTV News, on March 13 local time, a U.S. federal judge stated that the Department of Justice’s subpoena to Powell would be dismissed due to “almost no evidence.” (Nan Mu)