Federal Reserve Chair Jerome Powell delivered what amounts to a farewell address in his final major public appearance before Kevin Warsh takes the helm. He offered a blunt piece of unsolicited advice: "Stick to your knitting". The central bank, he argued, must resist the temptation to wander into non-monetary policy territory.
"There is always a temptation to want to move into other areas," Powell said. "We have very powerful tools. They are supposed to be for maximum employment, price stability and financial stability." He did not name names, but the timing and context left little ambiguity.
Warsh Hearing Drops Into a Volatile Macro Window
The Senate Banking Committee is preparing to hold a confirmation hearing for Warsh the week of April 13. That calendar places his nomination inside one of the most turbulent macroeconomic moments in recent memory. Inflation is rising again, US-Iran tensions are escalating and clouding the rate-cut outlook. The FOMC meets April 28-29, and whoever holds the chair by then inherits decisions with no clean answers.
Powell acknowledged the weight of the role: "What we do is very challenging and highly uncertain. The Fed is not a perfect institution. Don't look for perfection." He argued for something more subtle but critical: institutional independence. "We are not trying to work against any politician or any administration. But we have to be careful to stick to what we are doing."
Warsh Faces Pressure From All Sides — Plus a Crypto Bill
Warsh, a former Fed governor known for market-focused instincts and hawkish leanings, enters a confirmation process shaped by competing forces. The White House wants lower rates; markets demand clarity. Meanwhile, the CLARITY Act, which would formally define crypto assets under US law, is advancing toward a markup in April with growing bipartisan support, adding another regulatory dimension Warsh will need to navigate.
A Word to the Next Generation
Powell also addressed students entering a labor market reshaped by AI and immigration policy. "It is a challenging time to enter the labor market," he said. "But this economy is going to give you great opportunities. Master these new technologies." On whether AI will ultimately complement or replace human workers, Powell simply said: "It is so hard to say."