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What will occur when Federal Reserve Chair Jerome Powell’s term ends in May is turning into a game of chicken,Axios contends.

Powell’s tenure will conclude in under two months. However, who will succeed him — “during a period of high inflation, sluggish employment growth, and a conflict abroad pushing energy costs upward” — appears surprisingly unclear, according to the Axios report.

The controversy involving Powell intensified last week as a federal judgequashedSubpoenas issued by the Justice Department to the Federal Reserve. The subpoenas related to the Fed’s building renovation and Powell’s testimony regarding these matters. Judge James Boasberg described the subpoenas as “clearly pretextual.”

Trump was furious about Boasberg referencing the President’s social media messages and remarks concerning the Powell matter. The court “has no believable justification to believe that the Government is examining questionable circumstances rather than focusing on a disliked official,” Boasberg stated. He further noted that everything was intended to coerce Powell into “giving in.”

The Boasberg decision adds more uncertainty to Kevin Warsh’s nomination, the president’s choice to replace Powell at the Federal Reserve on May 15. A positive outcome for the administration would have enabled the OoJ investigation to conclude. It was expected that Republican Senator Thom Tillis, who had blocked progress on Warsh’s confirmation within the Senate Banking Committee, would change his stance.

What occurs next is influenced by several factors:

・Perhaps the administration’s requests regarding Boaberg are processed swiftly, leading to the judge’s decision being reversed;

・Perhaps the DOJ quietly abandons the Fed case, the Senate confirms Warsh, and he assumes his position in May.

・Perhaps Tillis steps back and the nomination moves forward

· Or maybe the Senate approves Warsh without advancing the nomination through the Banking Committee.

However, there are also “more unusual scenarios,” Axios points out, if Warsh is not approved by May 15.

Powell may continue in his role once his term ends. This has occurred previously, but only when Powell (2022) and Alan Greenspan (1996) were appointed to a second term. Another possibility is that the Federal Reserve Board of Governors might appoint a “chairman pro tempore,” potentially turning to vice chair Philip Jefferson.

However, as Axios stated, “None of this is typical. And time is running out for the main parties to address it.”

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