Trump’s Attempt to Oust Fed Chair Powell Backfires

Failed criminal probe could extend Powell’s tenure as ‘shadow Fed chair’

Mar. 22, 2026 at 4:08pm

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Donald Trump’s effort to force Federal Reserve Chair Jerome Powell out of office appears to have backfired, with the botched criminal prosecution potentially extending Powell’s stay rather than shortening it. The failed prosecution has had cascading consequences, including blocking the confirmation of Trump’s nominee Kevin Warsh to succeed Powell, leaving Powell as an effective ‘shadow Fed chair’ for the foreseeable future.

Why it matters

This case highlights the political tensions surrounding the Federal Reserve and the challenges faced by the central bank in maintaining its independence. The failed attempt to remove Powell raises questions about the limits of presidential influence over the Fed and the potential for political interference in monetary policy decisions.

The details

The Justice Department’s criminal probe into Powell’s congressional testimony regarding cost overruns on Fed headquarters renovations was invalidated by a federal judge, handing Powell a decisive legal victory. This has had ripple effects, including Powell reconsidering his retirement timeline and a key Republican senator blocking Warsh’s confirmation until the investigation concludes.

  • The Justice Department launched the criminal probe into Powell in January 2026.
  • A federal judge invalidated the subpoenas in the probe earlier this month (March 2026).
  • Powell’s term as Fed chair is set to expire in May 2026.

The players

Jerome Powell

The current Chair of the Federal Reserve, who has indicated he will remain on the Fed’s Board of Governors until the Justice Department investigation targeting him is resolved.

Donald Trump

The former U.S. President who attempted to force Powell out of his position as Fed chair.

Kevin Warsh

Trump’s nominee to succeed Powell as Fed chair, whose confirmation has been stalled due to the ongoing investigation.

Jeanine Pirro

The D.C. U.S. Attorney who launched the criminal probe into Powell’s congressional testimony.

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What they’re saying

““I have no intention of leaving the board until the investigation is well and truly over with transparency and finality.””

— Jerome Powell, Federal Reserve Chair

““The irony of the subpoena misadventure is that it may finally succeed in creating a shadow Fed chair … one called Jay Powell.””

— Krishna Guha, Head of Global Policy and Central Banking, Evercore ISI

What’s next

The federal judge’s decision to invalidate the subpoenas in the criminal probe against Powell is expected to be appealed by the Justice Department. Additionally, the key Republican senator blocking Warsh’s confirmation has stated they will maintain the hold until the investigation into Powell is fully resolved.

The takeaway

This case highlights the political risks and unintended consequences that can arise when the executive branch attempts to exert influence over the independent Federal Reserve. The failed prosecution of Powell has strengthened his position and could leave him as an effective ‘shadow Fed chair’ for the foreseeable future, contrary to the original intent of the Trump administration.