The transition of leadership at the Federal Reserve is facing a severe test. With the term of current Chair Jerome Powell set to expire on May 15, significant uncertainty exists over whether Kevin Warsh, nominated by former President Trump as his successor, can secure timely confirmation from the Senate. A legal and political battle over the leadership of the U.S. central bank is taking shape. Trump stated clearly this week that he would dismiss Powell if the Chair remains in his position after his term ends. Powell, however, insists that according to the law, he will continue to serve as "interim chair" until a successor is confirmed. The opposing stances of the two figures have cast unprecedented uncertainty over the leadership of the world's most influential central bank. The immediate trigger for this confrontation is Republican Senator Thom Tillis's vow to block Warsh's nomination from proceeding to a full Senate vote until the Justice Department ends its investigation into Powell. Analysts warn that if the White House attempts to force the leadership transition through legal means, it could undermine market confidence in the Fed's independence.

**Tillis's Obstruction Creates Thorny Path for Warsh** Warsh is scheduled to appear before the Senate Banking Committee for a hearing next Tuesday, but doubts loom over whether his confirmation process can be completed before May 15. The core resistance comes from Republican Senator Tillis. He has explicitly stated he will block Warsh's nomination from advancing to a full Senate vote unless the Justice Department drops its investigation into Powell. This investigation focuses on whether Powell made false statements to Congress regarding the approximately $2.5 billion renovation of the Fed's headquarters. Senate Banking Committee Chairman, Republican Senator Tim Scott, expressed confidence that the Justice Department would conclude its investigation "within weeks," but there is currently no indication the probe is nearing an end. Trump himself has clearly stated he wants the investigation to continue, even after a federal judge ruled this month that a government subpoena was merely a pretext to pressure Powell into lowering interest rates. Washington D.C. federal prosecutor Jeanine Pirro has pledged to appeal the ruling. Furthermore, this past Tuesday, two government prosecutors and an investigator attempted to visit the Fed renovation site but were denied access. From a procedural timeline perspective, the situation is equally challenging. According to Reuters, the Senate has historically completed a nomination process in less than a month between hearing and confirmation only once, and that instance involved a regular Fed governor, not the leadership position of the world's most important central bank.

**Does Powell Have the Right to Remain?** If Warsh is not confirmed by May 15, the question of Fed leadership will enter a legal gray area. Powell's position is clear. He previously stated, "If my successor is not confirmed before my term as Chair expires, I will continue to serve as interim chair. This is stipulated by law and has been a precedent on multiple previous occasions, including in my own case." The Federal Reserve Act states that Board members "shall continue to serve until a successor is appointed," providing a clear legal basis for Powell to remain. However, Trump's allies cite a different legal logic. A memo from the Carter administration has recently circulated among conservatives, suggesting the President has the authority to designate a sitting governor as acting chair while a nominee is pending confirmation. Some of Trump's allies believe he could appoint someone from his nominated governors—such as Stephen Miran, Michelle Bowman, or Christopher Waller—to perform the chair's duties. Most legal scholars are skeptical of this view. Columbia Law School Professor Lev Menand stated that Powell has the right to remain and that the President appointing someone else "lacks a legal basis," noting that the Carter administration's analysis is "extremely weak." Furthermore, the 1998 Federal Vacancies Reform Act explicitly prohibits the President from designating acting officials in multi-member commission agencies.

**Dismissal Threat – Unprecedented Constitutional Risk** If Trump's threat of dismissal is carried out, it would set a historic precedent and almost certainly trigger legal challenges. Trump stated clearly this week that if Powell does not leave voluntarily after his term ends, "then I will have to fire him." This remark is consistent with his previous public criticisms of Powell—he has called Powell a "fool" and a "stubborn mule," accusing him of refusing to cut interest rates. Such an action would be unprecedented. Trump's attempt last summer to dismiss Fed Governor Lisa Cook already faced legal challenges; that case is still before the U.S. Supreme Court, and Cook remains in her position. Derek Tang, an analyst at forecasting firm LH Meyer, pointed out that if the White House chooses the "nuclear option," pushing ahead through lawsuits and challenges, it could shake market confidence in the Fed, though he added that markets currently seem to show little overt concern about this potential risk.

**Powell's Fate Hinges on Investigation Outcome** Even if Warsh is eventually confirmed, it remains uncertain whether Powell will leave his Board seat early. Powell's term as a Governor extends to January 2028, far beyond his chairmanship. He had previously indicated a preference to follow the precedent set by most former chairs by resigning from the Board once a new chair takes office. However, unsealed legal documents reveal that Powell believes resigning while the investigation is still active would jeopardize the Fed's ability to set interest rate policy independently. He stated clearly last month that he would not leave the Board until the investigation is "completely finished, transparent, and conclusive." Analysts note that the increased likelihood of Powell remaining on the Board could, in turn, constrain Warsh's ability to reshape the Fed. Tang stated, "People will look at Powell's role not just from an economic perspective, but also from a moral one."

**Successor Faces Daunting Challenges** Even if the leadership transition is completed smoothly, the new chair will face a challenging policy environment. Krishna Guha, Vice Chairman of Evercore ISI, warned, "Applying political pressure on the central bank during a period of energy price shocks is not without risk, even if it ultimately comes to nothing. This marginally increases the risk of rising inflation expectations because markets may worry the Fed cannot take the necessary measures to bring inflation back to target over the medium term." LH Meyer's Tang raised a more pragmatic question: "The inflation reality in the coming months will be very tough. Do you really want your person in that seat to become the scapegoat for maintaining high interest rates?" White House spokesperson Kush Desai stated, "The White House remains focused on working with the Senate to confirm Kevin Warsh as the next Federal Reserve Chair as soon as possible." However, with Tillis's obstruction, the unresolved Justice Department investigation, and Trump's强硬 rhetoric, the path to achieving this goal is becoming increasingly complex.