Federal Reserve Chair Jerome Powell left open the possibility that he would remain at the central bank after his chairmanship ends next year.
Asked about his plans for departing the central bank, Powell said he had more important things to think about than his tenure at the Fed.
"My whole focus is on — and my colleagues' focus is all on — trying to navigate this tricky passage we're in right now, trying to make the right decisions," Powell said during a press conference following Wednesday's Federal Open Market Committee meeting. "We want to make the best decisions for the people that we serve. That's what we think of day and night, and this is a challenging situation that's 100% of our focus right now."
Powell's current term as chair, which began under then-President Joe Biden in 2022, ends next May, but his governorship does not expire for almost another two years.
Powell was originally appointed to the Fed Board of Governors by then-President Barack Obama in 2012 to take over a seat with term expiring in 2014. He was then renominated for a full 14-year term.
Legally, he does not have to vacate his governor seat, though past chairs have typically left the Fed swiftly once their successor is in place. The lone exception to that tradition is former Fed Chair
One of the leading candidates to replace Powell, according to various media reports, is former Fed Gov. Kevin Warsh, who served on the board from 2006 to 2011.
Last month, Warsh penned an opinion piece for the Wall Street Journal accusing the Fed of engaging in "mission creep," meaning the central bank is venturing beyond its statutory bounds. Specifically, Warsh accused the Fed of being overly involved in financial markets through its asset purchases and venturing too far into climate regulation.
Asked about these assertions, Powell said he welcomed the comments about asset purchases, also known as quantitative easing, or QE. He noted that it is a topic on which the Fed is currently reflecting — though one that is also squarely within its statutory bounds.
"We did things, essentially, on an emergency footing for a couple of years in the pandemic," Powell said. "And it's very fair and very welcome for people to look back over what we did and say, 'Hey, you could have done this better and differently.'"
Powell said he accepts criticism that the Fed could have done a better job of explaining its QE actions. He also acknowledged that the central bank likely expanded its balance sheet too much and for too long.
"We certainly, with the benefit of hindsight, could have tapered [asset purchases] earlier or faster, that's absolutely right," Powell said. "But this is all very welcome. We knew in real time that we weren't going to get it perfect, and those after-action looks are essential."
But, Powell was not as receptive to Warsh's claims that the Fed had been venturing outside of its monetary policy and financial stability roles by engaging in climate supervision. Powell pointed to his long-running assertion that the Fed's interest in climate risk oversight should be "narrow" and argued that the central bank's activities on this front were limited.
"We did one guidance for the banks and then we did a one-time climate stress analysis, and that's it," he said. "We dropped out of the Network for the Greening of the Financial System. We didn't do much on climate. I do think we've done a whole lot less on climate than some people seem to think we did."
Powell also argued that accusations that the Fed targeted certain categories of unemployment during its last monetary policy review in 2020 — something else that featured in Warsh's Op-Ed — were unfounded.
"We never targeted an unemployment rate for individual races or demographic groups," he said. "What we said was that maximum employment was a broad and inclusive goal."
Powell's comments came after the FOMC voted unanimously to maintain the Fed's interest rate target between 4.25% and 4.5% on Wednesday. The group pointed to continued uncertainty related to trade and other policies for its decision to keep rates unchanged.
