Powell won’t leave. The Fed won’t cut. Warsh will have to deal with both.

Subscribe to enjoy similar stories.At his Senate confirmation hearing last week, Kevin Warsh told lawmakers that the Federal Reserve needed a serious shaking up, with “messier meetings” and “a good family fight” at an institution that has cultivated discipline and consensus.He may be getting all of that and more.On Wednesday afternoon, the man he’s set to replace as Fed chair, Jerome Powell, announced he wouldn’t be leaving right away. Three of Powell’s colleagues delivered a pointed warning that they are in no mood to cut rates anytime soon.Every Fed chair for the past 75 years has left the central bank when his or her successor took over.

Powell’s announcement that he would remain on the Fed’s board as a governor after handing the baton to Warsh next month broke with that precedent. It underscored how far the Trump administration’s pressure campaign had pushed the Fed into uncharted territory.Powell’s decision followed a criminal probe of his oversight of building renovations.

Trump had cheered that investigation but prosecutors halted it last week to advance Warsh’s confirmation. Last year, Trump attempted to fire a Fed governor in a case that is now before the Supreme Court.“My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors,” Powell said at his news conference.

“I worry that these attacks are battering the institution.”Trump mocked the decision later Wednesday. Powell wants to stay, he said, “because he can’t get a job anywhere else.”Treasury Secretary Scott Bessent said it was Powell—not the administration—who was violating established practice.