Trump’s DOJ Owes Powell, Warsh and the Fed Clarity

Federal Reserve Chair Jerome Powell still hasn’t received the assurances he wants from Donald Trump’s Justice Department that the administration is done using the legal system to intimidate America’s independent central bank. As such, Powell said he plans to stick around as a governor after his chairmanship ends next month, until that threat is clearly extinguished. It’s in everyone’s best interest — including Trump’s — that the administration assuage Powell’s lingering doubts as soon as possible.

For all his good intentions, Powell’s decision to stick around as a Fed governor will make for an awkward start for his likely successor, Kevin Warsh. The public may worry about the Fed splitting into Warsh and Powell factions, and that perception could fuel policy uncertainty and market volatility. What’s more, Powell’s presence may serve to sustain Trump’s public feud with the policymaker he originally nominated to his position. None of this is a good look for the institution at the center of global finance — one that’s supposed to be technocratic in nature and largely above the day-to-day drama of Washington politics.