Bessent: Powell Should Step Down from the Board When His Term as Fed Chair Ends in 2026

According to a report by Jinse Finance, U.S. Treasury Secretary Bessent has suggested that Federal Reserve Chair Jerome Powell should step down from the Fed Board when his term as chair ends in May 2026. On Tuesday, Bessent stated, "By tradition, when the Fed Chair steps down, they also resign from the Board. There has been much discussion about a 'shadow Fed Chair,' suggesting that remaining on the Board before a formal nomination could cause confusion. I can say clearly that if a former Fed Chair continues to serve on the Board, it could be highly disruptive for the markets." Powell’s term as a Fed Board member does not expire until January 2028, which means that even after his chairmanship ends next May, he could remain at the Fed and participate in monetary policy decisions. Powell has repeatedly avoided responding to whether he will continue as a Board member. This silence complicates decision-making for President Trump and his aides as they consider changes to the Fed leadership next year. Bessent also noted, "The formal process for selecting the next Fed Chair has already begun, and there are many outstanding candidates both inside and outside the Fed."