Reuters: Powell to Remain Fed Governor After Chairman Term Ends, Regardless of Lawsuit Outcome

Declassified court documents reveal that Fed Chair Jerome Powell’s lawyer proposed in a meeting with the Department of Justice this January: if the criminal investigation continues, Powell will not step down from his Federal Reserve Board seat after his term ends in May—breaking a historical precedent. Reuters notes that these documents show more than just legal maneuvering; they appear to be a covert bargaining tactic from Powell’s camp: only if the investigation is dropped will he consider stepping down.

(Background: Powell admits to being under criminal investigation: because I refused Trump’s request to cut rates, I am targeted.)

(Additional context: Powell has said, “Unless I die,” he will never resign early—this is the last bastion of the Fed’s independence.)

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• Lawyer’s words: one statement, two interpretations
• Court blocks subpoena, DOJ threatens appeal
• Political logic behind the renovation controversy

According to Reuters, a batch of declassified court files released last Friday (March 14) show that Powell’s private lawyer conveyed a cautious yet profound message to U.S. District Attorney Jeannine Pirro during a closed-door meeting on January 29: if the criminal investigation continues, even after Powell’s May chairmanship ends, he “will not leave the board.”

This document stems from a legal case where the Fed attempted to block a DOJ subpoena. The case’s core is a dispute over the costs of the Washington headquarters renovation, but the broader context has been widely interpreted as political pressure.

Lawyer’s words: one statement, two interpretations

The court files quote Powell’s lawyer as saying: “The chairman believes that if he is still under investigation, he will not leave the board even after his term ends; and while he cannot say the same for others, if he is no longer facing criminal probes, his image would be different, and he could then make family-focused decisions.”

On the surface, this is a personal statement of intent, but in the legal context, it carries a clear implication: only if the investigation is dropped will Powell possibly resign from the board after stepping down as chair; if the investigation persists, he will remain on the Fed until his January 2028 term expires.

Typically, former Fed chairs do not continue serving as directors afterward. If this move materializes, it would be a rare precedent in Fed history. Notably, Treasury Secretary Scott Bessent publicly suggested Powell resign from the board at the end of his chairmanship, and this document indicates Powell’s camp’s response was “dependent on circumstances.”

Court blocks subpoena, DOJ threatens appeal

On the same day these files were declassified, District Judge James Boasberg ruled in favor of the Fed, blocking the DOJ’s subpoena. The ruling was direct, stating “the government has provided no evidence of a crime beyond the president being upset with the chairman,” implying the investigation lacks substantial criminal grounds.

The DOJ announced plans to appeal, extending the legal battle. Meanwhile, Republican Senator Thom Tillis (a member of the Senate Banking Committee) escalated political pressure, threatening to block the confirmation vote for Powell’s successor until the investigation is withdrawn—meaning if the appeal drags on, the Fed’s leadership succession could face a deadlock.

Political logic behind the renovation controversy

The DOJ’s official reason for the investigation is the costs of the Washington headquarters renovation, but Powell has publicly linked the probe to his repeated refusals to cut rates under Trump, viewing it as political retaliation rather than genuine criminal inquiry.

Powell’s term as chair will end on May 15, 2026, with his board seat extending until January 2028. If the DOJ’s appeal becomes a protracted stalemate, combined with Republican senators blocking nominations, the leadership uncertainty at the Fed could persist for months, potentially impacting market confidence and policy stability.