Federal Reserve Chair Jerome Powell is set to deliver what is expected to be his final news conference as head of the Fed on Wednesday, but his departure from the chairmanship next month may not mark his exit from the world's most powerful central bank.

Powell's term as Fed chair expires May 15. However, his underlying term as a Fed governor runs longer, allowing him to remain at the central bank until 2028 if he chooses. In March, Powell told reporters he had not decided on his next steps and declined to say whether he would remain on the Fed's board after his term as chair ends.

The circumstances are setting the stage for a standoff between Powell and President Donald Trump. What began as a disagreement over interest rates has escalated into a broader confrontation between Powell and Trump, marking one of the most fraught periods of his eight years as Fed chair.

Trump has intensified his pressure campaign in recent months, publicly criticizing the Fed's benchmark interest rate decisions and, at times, resorting to personal attacks against Powell.

What the Left Is Saying

Progressive Democrats have largely rallied behind the notion of Federal Reserve independence, arguing that allowing Powell to remain as a governor would serve as a check on presidential overreach into monetary policy.

Democratic lawmakers and progressive economic advocates argue that central bank independence is essential for maintaining credibility in financial markets. They contend that Trump's push to install allies at the Fed risks politicizing an institution designed to operate free from political pressure.

If Powell stays, he would retain influence over U.S. monetary policy while serving under a president who has publicly clashed with him over interest rate decisions. Progressives argue this dynamic could actually strengthen the Fed's independence by demonstrating that the central bank cannot be easily reshaped by executive pressure.

What the Right Is Saying

Republicans and Trump allies argue that voters granted the president a mandate to pursue his economic agenda, which includes lower interest rates and faster growth.

Trump has selected millionaire Kevin Warsh as Powell's potential successor. The former Morgan Stanley banker previously served on the Fed's Board of Governors, becoming the youngest member in its history at age 35. Like Powell, Warsh is not an economist by training but brings a background in law and finance.

Sen. Thom Tillis, R-N.C., had vowed to block Warsh's nomination until a Justice Department investigation into Powell's congressional testimony about Fed headquarters renovations was dropped. With that investigation now closed, a Senate panel is expected to take up Warsh's nomination, putting him on track for a full Senate vote.

Conservative critics of Powell argue he has been too slow to cut interest rates and question whether his monetary policy approach aligns with the administration's economic priorities. They contend that new leadership could better reflect Trump's vision for the economy heading into the 2026 midterm elections.

What the Numbers Show

Powell's original appointment to the Fed board came in 2017, when Trump selected him to succeed Janet Yellen. He was reappointed to a second four-year term as chair by President Joe Biden in 2022.

The question of leadership at the Fed comes as policymakers weigh persistent inflation, economic impacts from geopolitical tensions including the war in Iran, and a fragile global outlook.

The Supreme Court is expected to weigh in on a case involving Fed Governor Lisa Cook, which could test the limits of presidential power over the central bank.

The Bottom Line

Powell's decision on whether to remain as governor after his chair term ends carries major implications for markets and monetary policy. If he steps aside, it would open another seat for Trump to fill, giving him additional opportunity to shape the Fed's leadership. If Powell stays, tensions with the administration are likely to continue.

Attention now turns to Warsh's confirmation process in the Senate. His background as a former Morgan Stanley banker and previous Fed governor experience could appeal to some senators, though progressive Democrats may push back against his potential appointment. The outcome of Cook's Supreme Court case could also affect the broader landscape of presidential influence over the central bank.

Markets will be watching closely for signals from Wednesday's news conference about the Fed's near-term rate decisions amid ongoing economic uncertainty.