>The criminal probe into Jay Powell by US prosecutors has galvanised the Federal Reserve’s top leaders to resist President Donald Trump’s attacks and could push the chair to remain a governor until 2028, officials say.
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>“Why bother announcing it now with only a few short months remaining on Powell’s term as chair? The only answer I can divine is that it must be intended to try to intimidate Powell and his colleagues,” said David Wilcox, a former senior Fed official who is now at the Peterson Institute.
>“The problem, from the president’s point of view, is that Powell is not a person who will be easily intimidated. That’s not his personal character.”
>Wilcox, who also works for Bloomberg Economics, said that until Sunday evening his assumption was Powell would leave the Fed in May.
>“My guess is that the weekend’s announcements of the criminal investigation shifts that calculus dramatically and that the probability of Powell leaving when he steps down as chair went to approximately zero,” he said. “He will see now the severity of the threat to the institution and likely feel that he has no alternative but to stay.”
>Robert Tetlow, an economist who recently retired from the Fed, added: “It certainly might change the calculus on whether or not Powell leaves.”