Federal Reserve Chairman Jerome Powell announced last week he will remain on the Federal Reserve Board until 2028, even though by law his chairmanship ends. The decision comes after President Donald Trump agreed to drop a lawsuit against Powell for funding a $2 billion Taj Mahal building near the White House.
Powell will be the first Fed chair to stay on the board in 50 years. During his tenure, inflation hit the target range of 1.8% to 2.2% only once—February 2021. He retires with a batting average of .011.
As a close Fed watcher, Powell was one of President Trump’s worst appointments, his record proves. Two-thirds of the time, inflation exceeded the target. Would you keep someone with that lousy record in your starting lineup?
Powell nearly triggered a recession with excessively high interest rates in 2018 and then flooded the economy with cheap money after the pandemic. Inflation skyrocketed to 9%, its highest level since the late 1970s. Americans still pay high grocery prices due to this monetary blunder. The Fed promised “transitory” inflation, but it remained very high for two years.
Powell has used interest rate policy as a weapon against Trump. He criticized Trump’s tariffs publicly but ignored the disinflationary effects of Trump’s tax cuts, energy policies, and deregulation. He rarely spoke out against the Biden administration’s $4 trillion debt-financed spending spree. Powell finally lowered rates in 2024, but timing was suspicious just months before the presidential election. Was he manipulating the economy to help former Vice President Kamala Harris?
Powell never grasped that faster growth reduces inflation—not causes it. When the Fed gets this basic principle wrong, bad things follow. Trump’s tax cuts and “Drill, Baby, Drill!” policies expanded economic output. More production lowers prices, yet Powell squeezed the money supply.
Powell has been emboldened by media spats with Trump. He claims to want political independence but has played political cards against Trump more expertly and covertly than anyone else. His decision to stay on the board is pure political retaliation. This leaves Kevin Warsh, Trump’s nominee to replace Powell, in an awkward position as he tries to restore the Fed’s stable dollar direction.
To sit on the bench pouting is what sore losers do. A CEO doesn’t remain after being ousted unless the successor pleads for it—Warsh isn’t doing that. He has Powell’s mess to clean up. With publicly traded debt now exceeding annual GDP, Warsh should pledge in his inaugural address to cut the Fed budget and bureaucratic bloat by 10% to 15%. We don’t need 300 Ph.D. economists at the Fed to screw things up.
Powell can and should go home and write his memoir about how he attempted to undermine Trump every step of the way.
