Powell says he will be Chair Pro Tem as long as Warsh is not confirmed. Is it 100% going to happen?
Federal Reserve chairman Jerome Powell made an important announcement during the press conference after the March 18 interest rate meeting: “If my successor is not confirmed by the end of my term as Chair, I would serve as Chair pro tem until he is confirmed.”
Powell also committed to stay as Fed board governor as long as the Department of Justice’s probe into the Fed and him regarding the renovation project of the US central bank’s headquarters.
Powell’s intention to stay as “chair pro tem”, or pro tempore, which means temporary, is significant though, as it will have major implications for the US monetary policy in the second half of this year.
While Powell is confident that he assuming the role as temporary chairman is “what the law calls for” and he supported this view by saying “that’s what we’ve done on several occasions—including involving me,” there is actually a major legal opinion that may challenge his interpretation and provide a path to hand the chairmanship to… Governor Stephen Miran.
Why Warsh’s confirmation is stuck now?
Kevin Warsh, who President Donald Trump nominated as Powell’s successor, is currently facing a huge hurdle in obtaining his congressional confirmation; there is a significant probability that he will not complete the process within this year.
The reason Warsh’s nomination process is in limbo is simple: Republican Senator Thom Tillis vowed to block the procedure as long as the DoJ continues to investigate, as he views the legal action as Trump advisors’ push to end the US central bank’s independence.
As Tillis is a member of the Senate Banking Committee, which handles the first stage of Warsh’s nomination, and the committee is now split by a 13-11 Republican and Democrats division, Tillis’ vote can effectively block Warsh’s nomination from progressing to a full Senate vote.
Warsh’s confirmation hearing for the Banking Committee is now scheduled on April 21.
Greenspan also served as Chair Pro Tem
As he mentioned during the announcement, Powell has previous experience as Chair Pro Tempore in 2022. At that time, his chairmanship renewal nomination process couldn’t be finished by Feb 5, 2022, the official end date of his first Fed board chair term.
As he was already nominated by President Joe Biden to continue to serve the position in late 2021, the Fed board voted to give Powell the chair pro tem capacity so that he could continue to serve the US central bank as he waited for the second chairman term to become official, which eventually happened on May 23, 2022.
He is not the only Fed board chair who had served as chair pro tem. According to the St Louis Fed’s FRASER database, Alan Greenspan, Arthur Burns and Marriner S. Eccles also served the Fed board in this capacity.
Greenspan’s case from March 3 to June 20, 1996 is similar to Powell’s experience. President Bill Clinton renominated him on Feb 22 that year, but Greenspan’s chairman term was going to expire on March 2, so the Maestro had to take the pro tem chairmanship until he was formally confirmed for his third term on June 20.
One detail of both the Powell and Greenspan cases was that the official record showed that it was the Fed Board who elected them as Chairman Pro Tempore. Remember this, it will be useful in the next section.
Burns’ Chair Pro Tem Arrangement and its profound implication
Now we turn to the case of Arthur Burns. Burns’ situation was different from those of Powell and Greenspan’s cases—Burns was going to hand over his job to G. William Miller.
President Jimmy Carter only nominated Miller on Dec 28, 1977, but Burns’ chair tenure was about to end on Jan 31. As Miller was only confirmed on March 8, Burns helped keep the Fed chair seat warm temporarily.
The interesting thing about this case was that the Carter administration asked Department of Justice for their opinion of what should be the appropriate arrangement to the Fed Board chairmanship when Burns’ chair term expired and Miller had not been confirmed.
The DoJ opinion focused on one relevant line in the Federal Reserve Act:
“Upon the expiration of their terms of office, members of the Board shall continue to serve until their successors are appointed and have qualified.”
This rule says that a Fed governor shall stay at their position until their replacement is confirmed by the Senate. This is why Miran, whose term expired at the end of January, is still in the Board of Governors— the Federal Reserve Act encourages them to do so. This is probably also why Powell thinks the law gives him the power to stay as chair pro tem while Warsh is not confirmed.
DoJ, however, objected this reading. The line only stipulates what Board “members” should go when their successor has not been confirmed as governor; the law, they argued, says nothing about who should be the temporary chairman. In such a case, the DoJ argued that a 1876 ruling should govern the situation: the incumbent is not automatically entitled to continue; in fact, a “vacancy” in the position is created.
If the chair position is considered “vacant,” they argued, it should also mean that another line in the Federal Reserve Act is not applicable:
“At meetings of the Board the chairman shall preside, and, in his absence, the vice chairman shall preside.”
Here the DoJ’s opinion is that “absence” is meaningfully different from “vacant” in legal terms—as the former is more temporary and the latter more permanent—this means vice chair of the Fed Board also doesn’t assume the chairmanship naturally when the position became “vacant.”
Their conclusion is, hence, that it is preferable to let the President decide who should take the chairman duties for the interim period.
Carter seemingly adopted this opinion. Remember that in the previous section, Greenspan and Powell’s pro tem roles were based on Board of Governors’ decisions?
In the case of Burns staying beyond his chairman term in 1978, it was Carter who “designated” Burns to stay as “acting” Fed board chairman.
This should mean that there was a precedent that the President can decide who should be the interim Fed chair. While in all the previous cases it’s always the incumbent who continued to perform the role, it is not a must in this interpretation.
Given President Donald Trump’s recent record of “firing” Governor Lisa Cook and his public support to DoJ’s current Powell investigation, it is not hard to imagine he would opt to break the tradition and pick someone other than Powell to be chair pro tem. Say… Stephen Miran…?
Eccles’ special case
Honestly, among all the previous chair pro tem cases, Eccles’ experiences in 1948 should be most relevant. He is the only one to have opted to serve out the governor tenure after leaving the chair position; a move that many now suspect Powell would choose.
However, Eccles’ case is also quite unique, in the sense that President Harry Truman invited Eccles to not only stay in the board but also take the role of vice chairman, and it is Eccles who declined the vice chairmanship, only staying as governor.
Unfortunately, I have yet to find the relevant documents showing who decided he should be the chair pro tem back then, so I can’t draw any conclusions to Powell’s current situation.1
Does it matter though?
My conclusion is that we should expect the Trump administration to block Powell from taking the chair pro tem role and instead appoint one of the Trump appointed governors—Miran, Michelle Bowman or Chris Waller—to be the temporary Fed chair after May.
But does it matter? At this point, most Fed watchers would rightly point out that it doesn’t matter as far as monetary policy is concerned. This is because while the interim Fed Board chair would possibly be designated by the President, the chairman of the Federal Open Market Committee, the group that ultimately controls monetary policy, is selected by all of the FOMC members. It’s just always the case that FOMC selects the Fed Board chair as its chief.
Every year, the FOMC selects its chairperson at the first meeting of the year; Powell, as the tradition goes, was elected to be the FOMC chair for all of 2026. Yes, all of 2026, even as his Fed Board chair term ends in late May.
Normally, in the handover years, FOMC would add certain conditions on the chairman terms for the year. Take Greenspan for example, his last FOMC meeting was also the first meeting of 2006; so the committee voted Greenspan as chair for the rest of the day, with a notation vote to elect his successor Ben Bernanke as the FOMC chair for the rest of 2006. The transition from Bernanke to Janet Yellen, Yellen to Powell also has similar arrangements.
For the 2026 FOMC chair vote, no special arrangements were noted which likely means Powell by default holds the FOMC chairmanship for the whole year. Of course, one important distinction with the previous handovers is that in all three cases the next Chairs were already confirmed and simply waiting for their term to start; in the current case, Warsh’s confirmation process hasn’t even begun.
Still, the conclusion holds. As long as Powell is willing to stay in the Fed Board for the rest of this year and Warsh is yet to be confirmed as the new board chair, Powell is well within his rights to remain as FOMC chair.
Whether the President will try to give the interim Board chair seat to someone else or not, US monetary policy will likely remain in a safe pair of hands in the second half of the year.
Footnote:
- If you are a Fed historian/legal expert who has better knowledge on this question, please feel free to contact me to correct my interpretations.
Special thanks
- Special thanks to David Wessel for pointing me to the 1978 DoJ opinion memo, which inspired this article.
