Jerome Powell on Wednesday announced he will remain on the US Federal Reserve as a governor when his tenure as leader expires next month.
Mr Powell said he would remain "for a period of time to be determined" after the Fed held interest rates steady between the range of 3.5 to 3.75 per cent. The meeting was his final as head of the Fed. He has a separate term as governor that expires in 2028.
The decision comes a week after the Justice Department announced it is dropping its criminal investigation into Mr Powell over testimony that he provided to Congress on cost overruns for the multibillion-dollar renovation project at the Fed's headquarters in Washington. Mr Powell said the investigation was a pretext to coerce the Fed into lowering interest rates.
He welcomed the Justice Department's decision to drop the criminal investigation, but said it does not go far enough to suggest the inquiry is "well and truly over".
"These legal actions by the administration are unprecedented in our 113-year history, and there are ongoing threats of additional such actions. I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public," Mr Powell told reporters.
The investigation was a key sticking point in the confirmation process of Kevin Warsh, Mr Trump's pick to take over the mantle at the Fed. Mr Warsh, a former Fed governor, cleared a key hurdle on Wednesday after the Senate banking committee voted 13-11 to advance his nomination, which will now come before the Republican-controlled Senate for a final confirmation vote.
Mr Powell said he intends to keep a "low profile" and not to interfere with Mr Warsh.
Mr Powell does not set US interest rates unilaterally. As Fed chief, he steers a 12-person Federal Open Market Committee that includes himself, five other governors on the Fed board, the New York Fed president and five regional Fed presidents who serve in rotating one-year terms.
Mr Trump has sought several avenues to exert more influence in how the FOMC sets US interest rates, which he has repeatedly suggested should be the "lowest in the world".
After the surprise resignation of Fed governor Adriana Kugler, who was appointed by former president Joe Biden, Mr Trump nominated key economic ally Stephen Miran to serve on the board. Mr Miran has consistently voted to deliver aggressive interest rates and has been a frequent dissenter on the rate-setting committee.
The Supreme Court is also expected to rule on whether or not Mr Trump has the legal authority to fire Fed governor Lisa Cook, who he tried to sack last summer over accusations of mortgage fraud. Ms Cook has said Mr Trump's effort to remove her from the board is an attempt to lower interest rates.
