Staying on the board
Katkin thinks that Powell was already well aware of the support he would get by making this investigation public.
“He announced that he’s being criminally investigated, and then he already had this video ready to go that he released to the public,” Katkin said. “It seems there was already a lot of political support for his stance here. Immediately, Senator (Thom) Tillis has announced that he’s going to try to put a hold on any future Trump nominees to the Fed, unless this criminal investigation ends.”
The move comes a little more than four months before Powell’s term as Fed chair comes to an end. Traditionally, once the Fed chair leaves that position, they resign from the board as well. However, Katkin thinks this move may actually force Powell to remain through the end of his term in January 2028.
“It would be typical for most chairs to actually resign from being a governor when their chairmanship ends,” he said. “That’s what they usually do, even though they’re not required to do that. I think Trump actually just made that impossible. He probably has to stay on and not resign because he doesn’t want to look like he was pushed out, or like he had to leave because he’s actually a criminal.
“I think it makes it necessary for him to stay, so it seems very counterproductive to me. If Trump wanted to get rid of him, probably the best thing to do would have been just to be nice to him and compliment him for doing such a good job. He probably would have just resigned in May, but I think he’s likely to stay on the Fed for longer than that now.”
