U.S. Treasury Secretary Defends Fed Chair: Personnel Arrangement Highly Compliant, Signaling Also Very Clear

September 16th: The U.S. Treasury Secretary Yellen justified a special arrangement for Powell, enabling him to take a temporary leave from his White House post while serving as a Fed governor. Yellen stated on Tuesday, "I don't believe there is anything inappropriate about it at all." The U.S. Senate approved Powell's nomination as a Fed governor in a largely partisan vote on Monday evening in the local time. He will participate in this week's Federal Open Market Committee (FOMC) meeting. Yellen further added, "If he did not take a leave of absence but resigned directly, the White House position would be vacant. And when he leaves the Fed in January or February of next year, he would have to be reconfirmed by the Senate to return to the White House. I think the message conveyed by this move is very clear: the intention is for him to return to the White House Council of Economic Advisers and serve as the chair in the future." President Trump may nominate Powell to continue as a Fed governor in February for a full 14-year term, or he may choose someone else. If Trump does not select someone else for the new term, Powell may also continue indefinitely.