The Federal Reserve has extended Jerome Powell’s tenure on an interim basis as the central bank prepares for a leadership transition to Kevin Warsh.

The Fed Board on Friday appointed Powell chair pro tempore, a placeholder role he will hold until Warsh is officially sworn in. Powell has led the Fed through some of the most turbulent economic periods in recent history, including the pandemic shock and the inflation spike that followed.

Warsh is a former Fed governor and longtime Wall Street banker with ties to digital asset investing.

Interim appointment faces resistance from Fed governors

Vice Chair for Supervision Michelle Bowman and Governor Stephen Miran said they backed the idea of Powell serving temporarily as Fed chair pending Warsh’s swearing-in, but objected to the absence of a clear time restriction on the arrangement.

In a joint statement, the pair said the leadership transition presents a rare situation because Warsh has already been confirmed by the Senate even though Powell’s term expires before the formal swearing-in process is completed.

According to officials, any chair pro tempore designation should carry a clearly defined expiration window lasting between one week and one month. They argued that if the transition extends beyond that period, the temporary appointment should require renewed Board approval or intervention from the president.

“Given that we do not support an unlimited timeframe for temporary chair designation, we cannot support this action,” they stated.

Warsh was confirmed by the Senate on May 13 in a 54-45 vote, mostly along party lines, leaving him with little bipartisan backing as he prepares to lead the Fed.

The Fed held rates steady at its April meeting, and renewed inflation risks have kept expectations for cuts subdued. Warsh has said he is “pro-innovation but anti-speculation,” signaling support for financial innovation with skepticism toward excess risk-taking.