Powell to Stay on Fed Board as Criticism Mounts Over Rates, Inflation

Jerome Powell announced last week he has no plans to fully exit the Federal Reserve until 2028 even though his term as chairman ends in days. The move comes after President Trump dropped a lawsuit over the central bank's lavish new headquarters a short walk from the White House. Powell is the first Fed chair in half a century to hang on as a regular board member after leaving the top job. The decision fits a pattern of institutional arrogance that has defined his tenure and left working families stuck with the bill for higher prices that never really came back down.

Powell's record speaks for itself. In nearly eight years only one month February 2021 did inflation land inside the Fed's 2 percent target range. The rest of the time it ran hotter often much hotter. The man who promised price stability watched inflation explode to 9 percent in the aftermath of the COVID spending binge. Grocery bills remain painfully high across the country today because of it. First the Fed raised rates too aggressively threatening a recession then it flooded the system with easy money when Washington spent trillions more. The result was not the "transitory" inflation Powell and his colleagues kept predicting but a sustained hit to the purchasing power of every paycheck.

None of this appears to trouble Powell. He publicly attacked Trump's tariffs while ignoring the price-lowering benefits of tax cuts energy production and deregulation. He stayed largely silent on the four trillion dollars in new debt-fueled spending under Biden that supercharged demand. Now with his chairmanship ending Powell is digging in until what he calls the legal threat against the Fed reaches "transparency and finality."

That threat stems from an investigation launched by U.S. Attorney for the District of Columbia Jeanine Pirro. She has been examining massive cost overruns on the Fed's building renovation project and whether Powell misled Congress about them. Chief Judge James Boasberg blocked Pirro's subpoenas earlier this year ruling they looked too much like political pressure to force interest-rate cuts. Rather than appeal Pirro filed a motion Monday asking the judge to vacate his own orders. She insists the underlying probe continues and that she will keep fighting the ruling that she says interferes with legitimate grand jury work. Powell has made clear he will not leave the board while any shadow of that case remains. The whole episode reinforces the sense that the Federal Reserve answers to no one and views accountability itself as a form of interference.

All of this is unfolding while gas prices climb back above four dollars a gallon. The national average hit four dollars and forty-eight cents this week according to AAA and analysts expect further increases. The pain at the pump is reigniting talk of a federal gas-tax holiday. Even some prominent Democrats including Texas Senate candidate James Talarico and Arizona Senator Mark Kelly have floated suspending the 18.3-cent-per-gallon gasoline tax and the higher diesel levy. A recent Bipartisan Policy Center analysis found such a move would lower pump prices by roughly 9 to 14 percent but suppliers would pocket some of the savings and the lost revenue would starve the Highway Trust Fund. A suspension would not come close to erasing the dollar-and-a-half-per-gallon spike the country has endured. That larger problem traces back to the inflationary spiral Powell helped create and the global energy disruptions that followed years of weak policy in Washington.

While Powell clings to his seat President Trump is moving aggressively against Republicans who defied him in the states. In Indiana eight GOP state senators who voted against a Trump-backed congressional redistricting plan now face primary challenges on Tuesday. Trump has endorsed their opponents in seven of those races calling the defectors "Republicans in Name Only." The rejected map would have added two Republican seats in the U.S. House giving the party a stronger hand in Washington. Trump warned lawmakers last year that crossing him on the issue would bring consequences. Only two of the original holdouts are not seeking reelection. The message is unmistakable: loyalty to the voters who put Trump back in office matters more than personal relationships inside state capitols.

The contrast could not be clearer. An unaccountable central banker with a batting average on inflation that would get any normal employee fired refuses to walk away. Meanwhile the president elected to challenge these permanent institutions is using the tools available to him to remove obstacles and deliver results. Americans feeling the daily squeeze from elevated prices at the store and the pump have every right to wonder why the people who created the mess never seem to face real consequences. Powell's extended stay at the Fed only adds to that frustration. His departure cannot come soon enough for families still paying the price of mistakes made years ago.