President Trump's attempt to reshape the Federal Reserve leadership faces growing complications as Jerome Powell's term as chair ends May 15. The nomination of Kevin Warsh to replace Powell has been stalled by a criminal investigation into Powell's handling of Fed renovations, with Senator Thom Tillis refusing to advance the nomination until the probe concludes. Powell has indicated he may stay on as "chair pro tempore" if no successor is confirmed.

The Justice Department investigation has been widely criticized as politically motivated. Judge James Boasberg quashed subpoenas, writing there was "abundant evidence" they aimed to harass Powell. Trump has vowed to continue the probe, which he calls both a criminal inquiry and a "probe on incompetence," while Powell has vowed to protect the Fed's independence and indicated he has "no intention of leaving the board" until the matter is resolved.

Should the Senate fail to confirm Warsh by the May deadline, Powell could remain as governor until 2028, handing Trump a double loss by preventing both a new Fed chair and a new board member. Legal experts suggest Powell would prevail if Trump attempts to circumvent the confirmation process by appointing Stephen Miran as temporary chair, citing historical precedent and the Federal Reserve Act. The situation remains a critical test of the central bank's independence.