Federal Reserve Governor Milan: Hopes Powell is only temporarily staying on as governor, and has no more sinister plans.

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Federal Reserve Governor Milan commented on Powell’s status after stepping down as Chairman, saying he hopes this is only a transitional period, while also calling for interest rate cuts and advocating for reduced forward guidance, sending a clear signal of an easing policy stance.

Powell’s term as Chairman of the Federal Reserve will expire on May 15, but he stated last week that he will continue to serve as a governor until 2028. In an interview with the media on Friday, Milan said he hopes Powell’s retention "is just a transition and does not involve any more sinister schemes." Meanwhile, Wosh’s appointment as the next Fed Chairman is still pending Senate confirmation.

Milan’s remarks have to some extent sparked outside concerns about whether the power transition within the Fed will proceed smoothly. Although Powell said last week that he “does not seek to be a high-profile dissenter,” his continued presence on the board is seen by some observers as a potential balancing force to maintain the status quo during the changes led by Wosh.

Transition Risks: Milan Warns Against "Divided Loyalties"

In the interview, Milan made it clear that Powell’s remaining on the board could be helpful to the transition, but only if it is ensured that the arrangement is transitional:

“It is important to ensure this is a transitional period, and not let divided loyalties form inside the Fed, so people aren’t confused about who is in charge.”

Reports say that after the latest Federal Open Market Committee meeting last week, Powell stated that while waiting to see whether the Trump administration’s legal offensive against the Fed—which is widely seen as politically motivated—comes to an end, he will continue to serve as a board member.

Milan’s comments show that even insiders are closely watching the stability of the power structure at this sensitive juncture of the Fed leadership handover.

Monetary Policy Stance: Favors Rate Cuts, Advocates a More Flexible Framework

On monetary policy, Milan sent a clear dovish signal. He said rate cuts are appropriate, and the Fed’s current policy is restraining the labor market, while neither the labor market nor inflation expectations are pointing to further inflation increases.

Milan also believes the Fed should reduce forward guidance, arguing this would make the policy framework more flexible and help the Fed better respond to economic uncertainties.

On energy prices, he said the Fed should ignore the short-term impact of energy shocks, suggesting that policy-making should not be swayed by brief price fluctuations.

Overall, these statements are tilted toward easing, which supports rate-sensitive assets to some extent and provide an early reference point for the policy direction of the Fed under Wosh’s leadership.

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