Senate Banking Committee Chairman Tim Scott said Federal Reserve Chair Jerome Powell is making a "significant mistake" by staying on the Federal Reserve's Board of Governors after his term atop the central bank ends.
"He's breaking 75 years of precedent. Every time you get a new chairman, the former chairman leaves. That's good news because what you don't want are these philosophies in conflict," Scott, R-S.C., said Tuesday at the Milken Institute Global Conference.Â
"I think for the country and for the Fed, it would be best if he left," Scott said.
Powell's term as Fed chair ends May 15. By staying on, he is denying President Donald Trump a majority on the board, on which Powell could serve until 2028.
A spokesperson for the Fed declined to comment on Scott's remarks.
His choice to stay on the Fed board comes as Powell and Trump have clashed in the last year over the president's calls for lower interest rates. Trump has floated the idea of firing Powell, and his administration launched an investigation into cost overruns in the Fed's ongoing building renovations and related testimony to Congress by Powell.
Powell announced last week he plans to stay on the board for an indefinite period while the probe continues.
"I've said that I will not leave the board until this investigation is well and truly over with transparency and finality, and I stand by that. I'm encouraged by recent developments, and I'm watching the remaining steps in this process carefully," Powell said.
After suffering setbacks in a federal court, U.S. Attorney Jeanine Pirro dropped her criminal probe into Powell, referring the investigation to the Fed's inspector general. This move helped clear a political roadblock that threatened the nomination of Powell's successor, Kevin Warsh.
Sen. Thom Tillis, R-N.C., a pivotal vote on the Senate banking panel, had vowed to withhold his support for Warsh unless the Trump administration dropped its probe into Powell. Tillis ended his block in April after the criminal investigation was dropped. The committee advanced Warsh's nomination last week. The full Senate is expected to vote on Warsh as soon as next week.
Scott has said he did not believe Powell had committed a criminal act and said in March that he hoped the criminal investigation "goes away."
On Tuesday at the Milken Institute, Scott said of Powell's decision to stay on, "I do think maybe he's poking the president in the eye a little bit."
