Key Highlights 

  • Powell confirms he will not leave the Fed Board until the DOJ criminal probe ends with full transparency and finality 
  • His chair term expires May 2026, but his Board governor seat runs until January 2028 
  • A federal judge quashed DOJ grand jury subpoenas, ruling they were designed to pressure the Fed on rates, not pursue justice 
  • A key Republican senator is blocking Powell's would-be successor from being confirmed 
  • The Fed voted 11-1 to hold interest rates steady on March 18, 2026 

 

How Trump's Plan to Oust Powell Ended Up Keeping Him in Power Longer 

Trump tried to bury Powell under a criminal probe. Instead, he handed him a legal lifeline to stay indefinitely. 

What began as a White House pressure campaign to cut interest rates has evolved into one of the most consequential institutional standoffs in modern American history. The Trump administration's Justice Department launched a criminal investigation into Fed Chair Jerome Powell in late 2025, ostensibly over building renovations and congressional testimony. The strategy appeared designed to intimidate Powell into compliance or force him out ahead of schedule. It achieved neither. 

 

The DOJ Investigation: What It Is and What It Is Really About 

The probe centres on allegations that Powell abused his office and misled Congress regarding renovation works on two Federal Reserve buildings in Washington, D.C., and testimony he gave to the Senate in June 2025. Grand jury subpoenas were issued to the Fed in January 2026. 

Powell characterised the investigation not as a legitimate criminal inquiry but as a political instrument, the latest effort to wrest control of monetary policy from an independent central bank. The Federal Reserve has kept rates elevated despite repeated pressure from President Trump, who has argued that rates should be slashed aggressively. Powell has refused, citing inflation data and the Fed's statutory mandate. The criminal investigation followed that refusal like clockwork. 

 

The Courtroom Verdict: A Stunning Rebuke 

The DOJ's strategy suffered a major blow in early March 2026, when a federal judge quashed the grand jury subpoenas in a ruling remarkable for its directness. The court found substantial evidence that the subpoenas were issued not to investigate genuine criminal conduct but to pressure the Fed's board on interest rates. The ruling noted the government had produced virtually no evidence that Powell committed any crime other than displeasing the president. 

The Justice Department immediately appealed, and that appeal has become yet another legally airtight reason for Powell to remain exactly where he is. 

 

The Senate Blockade: Trump's Nominee Goes Nowhere 

Even if Powell wanted to leave, Trump cannot fill the vacancy. His nominee, former Fed governor Kevin Warsh, is stalled in the Senate Banking Committee. Senator Thom Tillis of North Carolina has vowed to vote against advancing Warsh's nomination for as long as the DOJ probe continues, calling it a politically motivated assault on Fed independence. Without Tillis, the committee cannot send the nomination to a full Senate vote. 

The very probe intended to dislodge Powell is the reason his successor cannot be seated. 

Conclusion 

The Trump administration set out to bend the Federal Reserve to its will. It has instead demonstrated precisely why central bank independence exists and how resilient it can be. Powell is not leaving on the White House's timeline. The DOJ probe meant to end his tenure may well be the very reason he outlasts the political pressure entirely. 

 In trying to remove Powell, the administration built the strongest possible case for keeping him 

 

FAQs 

Can Trump legally remove Jerome Powell? No. Federal law protects Fed governors from removal without cause, and courts have consistently upheld this independence. 

How long can Powell legally stay? His chairmanship expires May 2026, but his governor term runs until January 2028. He can serve as chair pro tempore until a successor is confirmed. 

What happens if Warsh is never confirmed? Powell continues as chair pro tempore indefinitely, retaining full authority over monetary policy. 

Is this the first time a president has clashed with the Fed? No, but using a criminal investigation as a lever against a sitting Fed chair is without modern precedent.