Multiple sources indicate Jerome Powell may resign by August

Multiple sources indicate Jerome Powell may resign by August

Jerome Powell, the current chair of the Federal Reserve, may be considering his resignation, according to recent reports. Federal Housing Finance Agency Director Bill Pulte has suggested that Powell is considering stepping down, citing unspecified reports. Pulte, a vocal critic of Powell, has been calling for his resignation since mid-June, following the Fed's decision to keep interest rates steady.

Powell's term as Fed chair ends on May 15, 2026, but his term as a member of the central bank's board of governors extends until January 31, 2028. He has not indicated whether he intends to serve out that term following his chairmanship. Pulte's criticisms have been directed at Powell's handling of monetary policy and the Fed's headquarters renovation project [1].

President Trump has publicly expressed his desire to see Powell step down, citing concerns about the Fed's policy decisions and the renovation project. Trump has appointed Powell to the role and has the authority to remove him for cause under federal law. However, the Supreme Court has ruled that Powell cannot be removed without cause [2].

The potential resignation of Powell could have significant implications for the Federal Reserve's monetary policy. Powell has been cautious about interest rate cuts, citing the need to wait for the impact of tariffs on inflation data. If Powell were to resign, the Federal Open Market Committee (FOMC) would need to select a new chair, which could lead to changes in the Fed's policy stance.

The financial markets have reacted to the reports of Powell's potential resignation, with yields climbing and the dollar sliding to a three-year low. However, traders are not yet convinced that Powell is truly finished, as the market continues to digest the news.

In conclusion, the potential resignation of Jerome Powell could signal a shift in the Federal Reserve's monetary policy. The appointment of a new chair could lead to changes in the Fed's approach to interest rates and other policy decisions. As the situation develops, investors and financial professionals should closely monitor the Federal Reserve's actions and the potential impact on the economy.

References:
[1] https://www.aol.com/director-federal-agency-suggests-fed-203352566.html
[2] https://www.cryptopolitan.com/fed-chair-jerome-powell-agrees-to-resign/