Bescent: Powell should step down from the board of governors at the same time as he steps down as Fed chair in 2026

The US Treasury secretary has suggested that Federal Reserve chairperson Jerome Powell should step down from the board of governors at the end of his term as chairperson in May 2026. "Traditionally, the chairperson of the Federal Reserve also steps down from the board of governors at the same time as he steps down," Mr. Bescent said on Tuesday. "There has been a lot of talk about'shadow Fed chairs', saying they would cause confusion before formal nominations. I can make it clear that if the former Fed chairperson stays on the board, it could be very disruptive for the markets." Mr. Powell's term as a Fed governor does not end until January 2028, meaning that even if his term ends next May, it is still possible to remain at the Fed and participate in monetary policy. Mr. Powell has repeatedly shied away from responding to whether he will remain on the board, a reticence that complicates the decision-making of President Trump and his aides as they reshuffle the Fed's leadership next year. "The formal process for identifying the next Fed chair has already begun, and there are many good candidates both inside and outside the Fed," Mr. Bessant added.