The question of whether is Jerome Powell going to resign has moved from a whisper in the halls of the Eccles Building to a full-blown national shouting match.
It’s personal now. Honestly, if you’ve been watching the news lately, you’ve seen the tension between the Federal Reserve and the White House hit a fever pitch that makes the Volcker era look like a friendly Sunday brunch.
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We are currently sitting in mid-January 2026, and the pressure on Powell is unlike anything we’ve seen in modern financial history. President Trump has been very vocal about his desire for a change at the top, basically calling for Powell to pack his bags before his term officially ends in May. But if you think Jay Powell is just going to walk away because of some mean tweets or a DOJ investigation into building renovations, you probably don't know the man very well. He’s stubborn. In a "defending the institution" kind of way.
The May 2026 Deadline and the Resignation Rumors
Let’s get the technical stuff out of the way first so we’re all on the same page. Jerome Powell’s second four-year term as Chair of the Federal Reserve expires on May 15, 2026. Under normal circumstances, most Fed Chairs just finish their time and head off into a lucrative sunset of speaking engagements and board seats.
But these aren't normal times.
Rumors about is Jerome Powell going to resign early have been fueled by a bizarre legal saga involving the renovation of the Fed's Washington headquarters. The Justice Department, led by U.S. Attorney Jeanine Pirro, has been digging into cost overruns on that $2.5 billion project. Trump has used this as a lever, suggesting Powell misled Congress and should step down immediately.
Powell’s response? He basically told reporters on December 10 that he wants to "turn this job over... with the economy in really good shape." He hasn't shown a single flicker of interest in leaving before that May 15 clock hits zero.
Why Powell Might Actually Stay Longer (Wait, What?)
Here is the twist that most people are getting wrong. Even if Powell stops being "The Chair" in May, he doesn't actually have to leave the Federal Reserve.
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See, the Fed is structured like a layer cake. Powell has two distinct roles:
- Chair of the Board of Governors (the four-year term ending in May 2026).
- Member of the Board of Governors (a 14-year term that doesn't expire until January 31, 2028).
Usually, when a Chair’s term is up, they resign from the Board entirely as a courtesy to the incoming President. It’s a tradition. But traditions are being tossed out the window lately. If Powell stays on as a regular Governor until 2028, he would effectively block Trump from appointing a new loyalist to that seat.
David Wilcox, a former Fed economist, recently noted that Powell likely views staying as a "solemn duty" to protect the Fed from political interference. If he stays, the White House doesn't get that extra seat on the board, which makes it way harder for a new, Trump-appointed Chair to push through radical interest rate cuts.
Who is Waiting in the Wings?
While the world asks is Jerome Powell going to resign, the White House is already looking at who takes the crown next.
Prediction markets are currently going wild. As of January 16, 2026, Kevin Warsh has surged to the front of the pack with about a 60% chance of being the nominee. Warsh is an interesting choice because he’s a bit of a hawk, but he’s also a former Fed governor who knows the plumbing of the system.
Then you have Kevin Hassett, who was the frontrunner for a while. He’s much more in line with the "cut rates now" philosophy that the President loves. You've also got names like Christopher Waller and Michelle Bowman—current governors who wouldn't need as much "on-the-job" training.
The drama isn't just about the person, though. It's about the confirmation. Senator Thom Tillis has already signaled he might block any new Fed nominees until this legal cloud over Powell is cleared up. It’s a mess.
The Stakes for Your Wallet
Why should you care if a 72-year-old millionaire in a suit stays or goes?
Simple: interest rates.
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The market hates uncertainty. If Powell were to resign tomorrow, Treasury yields would likely go haywire. We’d probably see a "steepening" of the curve, which is fancy talk for "investors panicking about future inflation."
Powell has been the "go-slow" guy. He’s obsessed with getting inflation back to that 2% target, even if it means keeping rates higher for longer than the White House wants. A new Chair might be pressured to slash rates to juice the economy, which sounds great for your mortgage but could be a disaster for the price of eggs and gas if inflation takes off again.
Is Jerome Powell Going to Resign? The Final Verdict
If you’re looking for a "yes" or "no," the answer is almost certainly no—not before May.
Powell has framed his remaining months as a mission. He wants to stick the landing on a "soft landing" for the economy. He’s not going to let a subpoena or a public pressure campaign be the reason he walks away. He knows that if he quits under pressure, he sets a precedent that the Fed Chair serves at the pleasure of the President, which is exactly what the Federal Reserve Act was designed to prevent.
The real drama starts on May 16. That's when we find out if Powell is going to take the unprecedented step of staying on the board as a "regular" governor just to be a thorn in the side of the next administration.
Actionable Insights for the Months Ahead:
- Watch the Treasury Yields: If you see the 10-year yield spiking, it’s a sign the market thinks the Fed is losing its independence.
- Ignore the "Headquarters" Noise: The DOJ investigation is largely seen by Wall Street as political theater. Focus on the FOMC meeting minutes instead.
- Expect a Confirmation Battle: Even if a successor is named this month, don't expect a smooth ride through the Senate.
- Check Your Fixed Rates: If you’re planning on refinancing, the window of stability under Powell might be closing. Once a new Chair is confirmed, volatility is the only guarantee.
The Fed isn't just about numbers; it's about power. And right now, Jerome Powell isn't ready to give his up.