Powell Says He Will Remain Fed Chair Past May Term End While DOJ Probe and Warsh Confirmation Stall
Jerome Powell said he intends to remain “chairman pro tempore” after his May 15 term expires and to stay on the Fed Board until a DOJ criminal probe is resolved, as Kevin Warsh’s nomination is stalled by Sen. Thom Tillis and a federal judge recently quashed two DOJ subpoenas targeting the Fed. At the March meeting the Fed held the funds rate at 3.5–3.75%, raised inflation forecasts and—facing an Iran‑war energy shock and softer job growth—produced projections showing more officials now expect no rate cuts in 2026, a shift that rattled markets as oil and yields rose and stocks fell.
📌 Key Facts
- The Federal Reserve left the federal funds rate unchanged at 3.5%–3.75% on March 18, 2026, marking a second straight pause; the FOMC vote was 11–1 (with Governor Stephen Miran dissenting in favor of a 25 bps cut) and Chair Jerome Powell repeatedly emphasized heightened uncertainty about the outlook.
- The Fed’s new Summary of Economic Projections (dot plot) kept the median view of one 25‑basis‑point cut in 2026 (unchanged from December) but showed substantial internal shifts — more officials now expect no cuts this year and several reduced their earlier cut projections — and market odds (CME FedWatch) rose toward a roughly 75% chance of no cuts in 2026.
- Policymakers raised their 2026 inflation forecasts (headline and core projections moved up to about 2.7%), while recent data showed inflation pressures firming: core PCE was about 3.1% year‑over‑year in January and producer prices rose 3.4% year‑over‑year in February.
- The economy presents a difficult mix of weaker hiring and higher inflation: Labor Department data showed U.S. employers cut about 92,000 jobs in February, unemployment rose to 4.4%, and revisions left virtually no net job growth over the past six months.
- The U.S. energy shock from the Iran war (launched Feb. 28) has materially affected markets and Fed risk assessments: Brent briefly topped $109.95/barrel (settling near $107.38), U.S. crude approached $99 (settling near $96.32), national gasoline averaged about $3.79/gal (up ~$0.88 month‑over‑month), and the Fed added language citing uncertainty from 'developments in the Middle East.'
- Markets reacted to the Fed decision and inflation data: the S&P 500 fell ~1.1%, the Dow dropped roughly 668 points (~1.4%), the Nasdaq declined ~1.1%, and the 10‑year Treasury yield rose (to about 4.25% from roughly 3.97% before the Iran war).
- Chair Jerome Powell said he intends to remain Fed chair (serving as 'chairman pro tempore') after his term ends May 15 if nominee Kevin Warsh has not been confirmed and that he has 'no intention of leaving the Board' until the DOJ criminal investigation into him is 'well and truly over' — he could also remain on the Board beyond the chairmanship (potentially through 2028).
- Kevin Warsh’s confirmation is stalled: Sen. Thom Tillis is formally blocking the nomination while the DOJ probe into Powell is pending and Senate Democrats on the Banking Committee oppose confirmation; a federal judge (James Boasberg) recently quashed two DOJ subpoenas as improperly aimed at pressuring Powell, but U.S. Attorney Jeanine Pirro has said she will continue the investigation.
- Amid the political and legal conflict over the probe, the JFK Library Foundation announced it will award Powell the John F. Kennedy Profile in Courage Award on May 31, citing his defense of Fed independence.
📊 Relevant Data
President Trump has sought to replace Jerome Powell as Fed Chair due to disagreements over interest rate policies, initially wanting rates held higher to avoid benefiting the previous administration and later pressuring for cuts to support economic growth.
Trump's Fed plan may have backfired with Powell staying on as chair — Fortune
The DOJ investigation into Jerome Powell focuses on whether he provided truthful testimony in June 2025 to Congress about the details and costs of the Federal Reserve's $2.5 billion headquarters renovation project.
Fed's Powell under criminal investigation over HQ renovation — Fox Business
Higher interest rates lead to greater reductions in consumption for households headed by Black women compared to those headed by White men or Black men, with Black women-headed households reducing spending by larger amounts when rates rise.
The Unequal Effect of Interest Rates by Race, Gender — Federal Reserve Bank of San Francisco
Black American households spend a greater share of their income on energy costs, such as heating and electricity, compared to the national average, with this disparity linked to older and less energy-efficient housing.
Study finds Black Americans spend more on energy costs — The Black Wall Street Times
Monetary policy changes, such as interest rate adjustments, have distributional effects that can widen racial wealth gaps, with expansionary policies potentially reducing unemployment more for Black workers relative to White workers.
Monetary Policy and Racial Inequality — Federal Reserve Bank of New York
📊 Analysis & Commentary (1)
Roundup #79: The revenge of macroeconomics
"The piece argues that the Iran war’s oil shock has brought macroeconomics back to the forefront—forcing forecasters to postpone Fed rate cuts, exposing the limits of one‑off fixes like SPR releases, and underlining that policymakers must reckon with large supply‑side geopolitical shocks rather than assume a smooth return to disinflation."
📰 Source Timeline (10)
Follow how coverage of this story developed over time
March 19, 2026
9:31 PM
Justice Department probe of Powell could backfire on Trump and keep Fed chair in office
New information:
- Jerome Powell said he will remain chair of the Fed’s interest‑rate‑setting committee after his term ends May 15 if no successor is confirmed and could stay longer while the DOJ investigation continues.
- Powell stated he has "no intention of leaving the board until the investigation is well and truly over, with transparency and finality," and has not yet decided whether to leave once the probe ends.
- Trump’s chosen successor, former Fed official Kevin Warsh, is stalled because Sen. Thom Tillis (R‑N.C.) refuses to confirm any Fed nominees while the DOJ investigation is pending and Banking Committee Democrats are opposed.
- A federal court ruling by Judge James Boasberg last week quashed two subpoenas from U.S. Attorney Jeanine Pirro seeking information on the Fed’s $2.5 billion building renovation, finding the subpoenas’ dominant purpose was to pressure Powell to yield to the president or resign.
- The JFK Library Foundation announced it will award Powell the John F. Kennedy Profile in Courage Award on May 31 for protecting Fed independence despite years of attacks and threats from "the highest levels of government."
6:31 PM
3 reasons the Federal Reserve's interest rate pause is worrying investors
New information:
- CBS tallies Powell using the phrase 'we don’t know' at least 14 times and 'wait‑and‑see' four times in his press conference, underlining how unusually uncertain the Fed is about the economic outlook.
- Economists quoted say the Fed was 'blindsided' by recent inflation data and is 'paralyzed' or 'frozen' by the Iran conflict and the effective closure of the Strait of Hormuz, which they characterize as the number‑one economic risk.
- CME FedWatch data now show an almost 75% probability of no interest‑rate cuts in 2026, versus prior expectations of one or two cuts before this meeting.
- The article highlights that seven Fed officials now project no cuts in 2026, seven project one cut and five project two or more, emphasizing how divided the FOMC has become.
- Powell acknowledges that private‑sector job creation has effectively stalled even as unemployment stands at 4.4%, spotlighting a softer labor market that still coexists with above‑target inflation and rising energy prices driven by the Iran war.
March 18, 2026
7:51 PM
U.S. stocks sink on worries about inflation as gold falls below $5,000 per ounce
New information:
- On March 18, 2026, the S&P 500 fell about 1.1%, the Dow Jones Industrial Average dropped roughly 668 points (about 1.4%), and the Nasdaq Composite declined about 1.1% following the Fed’s decision and new inflation data.
- The latest U.S. wholesale inflation reading showed producer prices accelerating to 3.4% year‑over‑year, indicating inflation pressures were worsening even before the Iran war’s oil spike.
- Brent crude oil briefly hit $109.95 per barrel and settled at $107.38, while U.S. benchmark crude nearly reached $99 before settling at $96.32, with the article tying the spike directly to Iran war disruptions and Iranian threats against Gulf state energy infrastructure.
- The Fed voted 11–1 to keep rates unchanged, with only one official favoring a cut, and Powell emphasized heightened uncertainty about oil prices and tariffs, saying, “We just don’t know.”
- The article reports that several Fed officials shifted their internal projections from two cuts in 2026 to one, even as the median projection still shows one cut, contributing to a rise in the 10‑year Treasury yield to 4.25% from 4.20% the prior day and 3.97% before the Iran war.
7:22 PM
Fed keeps rates on hold, Powell says he will remain in place until successor confirmed
New information:
- Jerome Powell said he intends to serve as 'chairman pro tempore' of the Federal Reserve after his term ends on May 15 if nominee Kevin Warsh has not been confirmed.
- Powell stated he has 'no intention of leaving the Board' until the criminal investigation into him is 'well and truly over with transparency and finality.'
- Sen. Thom Tillis is formally blocking Warsh’s confirmation until the Powell investigation is resolved; Powell, Tillis and a federal judge all view the probe as a pretext to pressure Powell to cut rates.
- U.S. Attorney Jeanine Pirro has vowed to continue the investigation despite a federal judge’s scathing ruling quashing DOJ subpoenas of the Fed.
- New FOMC projections show 12 Fed officials expect at least one rate cut in 2026, while seven now project no cuts this year, up from four in December.
- The FOMC added language highlighting uncertainty from 'developments in the Middle East' and updated its description of unemployment from 'showing signs of stabilization' to 'little changed in recent months.'
- Fed governor Stephen Miran was the lone dissent, favoring a 0.25 percentage point rate cut.
6:28 PM
Federal Reserve holds interest rates steady, citing economic uncertainty
New information:
- FOMC on March 18, 2026 left the federal funds rate unchanged at a 3.5%–3.75% target range, marking a second straight pause this year.
- The Fed’s new Summary of Economic Projections still shows one 0.25‑point rate cut in 2026, unchanged from December, signaling policymakers expect the Iran war energy shock to be transitory enough to resume cuts later.
- The Fed raised its 2026 headline and core inflation projections to 2.7% (from 2.4% and 2.5% respectively).
- The article notes February’s Producer Price Index rose 3.4% year‑over‑year, the hottest in a year, suggesting inflation was firming even before the Iran conflict hit energy prices.
- The piece underscores that the U.S. lost 92,000 jobs in February and highlights that Powell will face questions about both the energy shock and his looming May term end with Kevin Warsh’s stalled nomination.
6:07 PM
Federal Reserve announces it will hold interest rates steady
New information:
- CBS piece confirms, in a separate source, that the Fed has held the federal funds rate at 3.5%–3.75%.
- No additional detail beyond the bare decision and rate range is provided in this clip compared with the existing multi‑source coverage that already includes the same rate range and date.
9:00 AM
The Federal Reserve is facing tough choices as the economy faces deep uncertainty
New information:
- Labor Department data show U.S. employers cut 92,000 jobs in February, with unemployment rising to 4.4% and revisions leaving the economy with virtually no net job growth over the last six months.
- January inflation on the Fed’s preferred measure is 3.1%, still well above the 2% target, and Fed officials had previously projected 2.5% inflation and 4.4% unemployment by year‑end before the Iran war shock.
- A federal judge recently quashed two DOJ subpoenas to the Federal Reserve, calling them part of an improper harassment campaign to force Powell and colleagues to cut rates, and Sen. Thom Tillis is blocking Kevin Warsh’s confirmation over DOJ’s refusal to drop the criminal probe.
- Jerome Powell’s term as chair ends in May, but because Warsh is stalled, Powell could end up remaining as chair into the summer and has the option to stay on the Fed Board until 2028, which analysts frame as part of his effort to defend Fed independence.
4:51 AM
Federal Reserve could signal no interest rate cuts this year in wake of Iran war
New information:
- Fed officials are considering altering their projection from one rate cut in 2026 to zero in the new quarterly Summary of Economic Projections.
- The article reports the policy rate is almost certain to be held at about 3.6% for the second consecutive meeting.
- AAA data cited in the piece put national average gasoline at $3.79 per gallon as of Tuesday, up $0.88 from a month earlier, and the article notes this Iran war–driven spike will likely push the Fed to raise its inflation forecast, potentially to around 3% even by late 2026.
- The story highlights that the Iran war, launched Feb. 28 by the Trump administration, is a central reason the Fed now faces the worst‑case combination of higher inflation and a possible rise in unemployment.
- It notes this is one of Powell’s last meetings as chair, with his term ending May 15 and his replacement, Kevin Warsh, stalled in the Senate over a DOJ investigation into Powell that recently saw subpoenas quashed by a judge.
March 17, 2026
3:56 PM
New economic projections signal a tricky Federal Reserve path
New information:
- Axios reports that the Fed’s new Summary of Economic Projections and dot plot, due Wednesday, will be the first for 2026 and will show how policymakers are factoring in the Iran war energy shock alongside already hot inflation.
- Pantheon Macro economist Sam Tombs expects the dot plot to still show a bias toward easing in 2026 and 2027, but warns markets could react sharply if the median Fed official now projects no rate cuts this year.
- Axios notes that core PCE inflation accelerated to 3.1% year‑over‑year in January from 2.8% in November, and that revised jobs data imply essentially no net hiring in December or February, raising doubts about Jerome Powell’s earlier "low‑hire, low‑fire" labor-market characterization.
March 16, 2026