Sen. Tim Scott criticizes Jerome Powell’s plan to remain at Federal Reserve, urges IG review

Sen. Tim Scott, chairman of the Senate Banking Committee, told Fox Business that Federal Reserve Chair Jerome Powell’s intention to remain at the central bank would break a longstanding precedent and risk blurring leadership transitions at the Fed. Scott said it would be “best if he left,” arguing for fresh leadership to preserve institutional independence.

Scott said investigators should focus on understanding why renovation costs at the Fed’s headquarters were so high and that moving the matter from a criminal inquiry to the Fed Inspector General was the appropriate step. “The IG having all the tools necessary to do a thorough investigation would get done,” Scott said, adding that if a criminal referral were warranted, it should follow the IG’s work.

Why it matters: Scott framed the issue as one of governance and oversight, saying the Fed needs leadership and players focused on its dual mandate rather than internal influence. He warned that a predecessor remaining in place could allow lingering influence over policy decisions.

Scott also tied recent bank failures to lapses in supervisory focus. He suggested noncore priorities, including discussions of ESG and climate, distracted regulators during the Silicon Valley Bank failure and urged changes in leadership and supervisory playbooks to prevent recurrence. “Their eye wasn’t on the ball at SVB,” Scott said.

The interview included no new formal action by the committee. Scott said he expected Powell might depart before 2028 and described ongoing work to ensure the Fed’s oversight and follow-up on supervisory remediation actions. The IG named in the interview was characterized as the proper entity to probe procurement and renovation questions before any criminal escalation.