Powell to Remain Fed Chair, Dismisses Resignation Calls | US Economy News

Jerome Powell indicated he intends to remain on the Federal Reserve board as a governor even after his term as chair ends next month, a move that comes as the central bank is expected to hold interest rates steady at its April 29 meeting. The decision to stay on the board is unusual and comes amid scrutiny from former President Donald Trump, who has repeatedly threatened to fire Powell.

The Federal Reserve is widely anticipated to leave interest rates unchanged, maintaining the target range at 3.5% to 3.75% following the conclusion of its two-day meeting today. This decision reflects concerns about both rising inflation, driven in part by elevated global energy prices and the ongoing war in the Middle East, and potential weakness in the job market.

Powell’s Future Role and Trump’s Criticism

Powell’s announcement that he would remain on the board as a governor, rather than leaving entirely, is an atypical step. This allows him to continue participating in policy decisions, albeit without the chairmanship. The move comes as President Trump has publicly criticized Powell’s leadership and even threatened to dismiss him if he remains in his role, according to reporting from CNN.

The potential for conflict between the administration and the Federal Reserve has increased as Trump has renewed his threats to fire Powell. This situation raises questions about the independence of the central bank, a principle that is considered crucial for maintaining economic stability.

Inflation and Economic Concerns

The Federal Open Market Committee (FOMC) acknowledged that inflation remains elevated, partly due to the recent surge in global energy prices. The Consumer Price Index rose from 2.4% in February to 3.3% in March, adding to concerns about persistent inflationary pressures. New tariffs implemented by the Trump administration, coupled with higher oil prices and disruptions to supply chains stemming from the war, are expected to keep prices high in the near term.

The key question facing the FOMC is whether these inflationary shocks will be temporary or persistent, a determination that hinges on the duration of the conflict in the Middle East. While the committee voted 8-4 to hold the fed funds rate steady, the policy statement highlighted the ongoing concerns about inflation.

Labor Market and Rate Cuts

Concerns about a slowing labor market prompted the FOMC to cut rates three times in late 2025. However, recent data from the Labor Department, indicating that U.S. Employers added 178,000 jobs in March, has offered some relief. Despite this positive development, concerns about a low-hire environment persist.

Despite the recent job gains, the FOMC will be closely monitoring economic indicators to assess the strength of the labor market and the potential need for further rate adjustments. The central bank will also be evaluating the impact of higher oil prices and supply chain disruptions on the overall economy.

Market Reaction and Future Outlook

Markets are anticipating Powell’s press conference following the FOMC meeting, seeking clues about the central bank’s outlook on inflation and the job market. Investors will be scrutinizing his language for any indication of whether officials view inflation or economic weakness as the greater threat. The outcome of the April Fed meeting and Powell’s subsequent comments are expected to significantly influence market sentiment and future investment decisions.

The Kiplinger team is reporting live on the April Fed meeting, bringing you the news and our expert analysis of what it could mean for the economy. With spiking energy prices lifting inflation and Federal Reserve Chair Jerome Powell at the end of his term, the central bank is widely expected to keep the federal funds rate unchanged this time around.