Imitating former chairman Eccles? Deutsche Bank: Powell may stay on as director after stepping down to defend Fed's independence.

Over the weekend, President Trump announced that he had identified a successor to Federal Reserve Chairman Powell, making the Fed the focus of recent market attention. On Tuesday, Trump further indicated that he plans to announce the nominee early next year. In response, Deutsche Bank pointed out on Tuesday that after the Chairman's term ends, he can continue to serve as a member of the Federal Reserve Board, and Powell may face a similar situation. Analyst Jim Reid stated: "The market generally believes that once the Chairman's term is over, even if there are still several years left in their term as governors, they will completely exit the Federal Reserve. This view is in line with tradition but has no legal basis." "This is what makes the issue interesting. Powell's term as Chairman will end in May 2026, but his term as a member of the Board will continue until January 2028. From a legal standpoint, he has the right to remain. Of the 15 previous Fed Chairs, only two chose to stay on for an extended period after stepping down as Chair - their experiences provide important reference backgrounds for Powell's decision," Reid added. The first was the inaugural Federal Reserve Chairman, Charles Hamlin. He took office in 1914 and after his term expired in 1916, he remained a member of the Board for twenty years. Reid said: "As a career civil servant, Hamlin's motivation stemmed from loyalty to the institution. He believed that the mission was far more important than the title. The second - and a more relevant precedent - is Marriner Eccles." "After leading the Fed through the Great Depression and World War II, Eccles was ousted as Chairman by President Truman in 1948. Instead of resigning, he chose to stay on as a member of the Board. While Truman replaced him as Chairman, he invited him to remain on the Board, in part because Eccles was highly respected in the markets, and in part because the President knew he lacked the authority to force Eccles to leave. Eccles chose to stay on to defend the independence of the central bank." Reid further noted: "In 2026, Powell may face a similar situation. If the political environment is perceived as threatening the Fed's ability to independently conduct monetary policy, he may choose to adopt Eccles' strategy. By retaining his seat on the Board, he would maintain his voting rights on the Federal Open Market Committee, although such a move hasn't been seen in decades. This will largely depend on the nominee for the next Fed Chair appointed by the government." Currently, Wall Street is closely monitoring the independence of the central bank. After experiencing significant volatility in mid-November, the market has rebounded significantly, with the S&P 500 index still maintaining double-digit gains for the year.