WASHINGTON D.C. — Federal Reserve Chair Jerome Powell will step down from the chairmanship next month and remain on the Board of Governors, the first time since 1948 that a departing chair has stayed on the board. Federal Reserve chairs typically step down entirely once their term ends.

"I plan to maintain a 'low profile,'" Powell said. "I will leave when I think it's appropriate to do so."

Powell's tenure included a Justice Department probe related to renovations at the Federal Reserve's headquarters, which the department dropped while saying it would reopen the investigation if warranted. An inspector general investigation into the renovation project remains ongoing.

"I've said that I will not leave the board until this investigation is well and truly over with transparency and finality, and I stand by that," he said. He distinguished verbal criticism from legal action taken against the central bank. "And I want to note here, this has nothing whatever to do with verbal criticism by elected officials. I've never suggested that such verbal criticism is a problem, and neither has anyone else here, but these legal actions by the administration are unprecedented in our 113 year history, and there are ongoing threats of additional such actions," he said.

He also expressed concern about the effect on the institution. "I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors," he said.

Powell was appointed Federal Reserve Chair by Donald Trump in 2017. During his chairmanship, he publicly rebuked calls from the president for interest rate cuts. He favored wearing purple ties to avoid signaling alignment with either major political party.

The Federal Reserve held its target interest rate at 3.5% to 3.75%, an outcome CME FedWatch had assigned a 100% probability ahead of the meeting. The central bank said, "Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook." It added, "Job gains have remained low, on average, and the unemployment rate has been little changed in recent months. Inflation is elevated, in part reflecting the recent increase in global energy prices."

The Federal Reserve operates independently from the White House and is guided by a dual mandate to achieve maximum sustained employment and keep inflation near 2%. A global shutdown in the post-COVID era triggered multiple supply shocks that sent inflation surging, with economic ripple effects that are still ongoing.

Kevin Warsh was confirmed by the Senate Banking Committee in a party-line vote, advancing his nomination to succeed Powell as Federal Reserve Chair.