President Trump’s aggressive push to reshape the Federal Reserve may be careening towards a legal and procedural stalemate that could leave his chief antagonist, incumbent Fed chairman Jerome Powell, in a position of power long after his official term as chair expires.

As the May 15 deadline for Powell’s chairmanship approaches, the administration’s plan to install Kevin Warsh as the new head of the central bank has hit a wall of Senate gridlock and statutory technicalities. The result may be a “hilarious backfire” where the very independence Trump seeks to curtail is instead reinforced by the Fed’s own internal bylaws.

Under the Federal Reserve Act, the chair must be selected from the sitting board of governors. Because there are currently no vacancies, a seat must open for Warsh to join the board. The White House had eyed the seat held by Stephen Miran, whose temporary term expired on January 31 2026. However, Miran, who recently resigned his White House post as chair of the Council of Economic Advisers to stay at the Fed, is legally permitted to serve in a “holdover” capacity until a successor is confirmed.

With Senate Democrats reportedly blocking new appointments until legal disputes involving current governors are resolved, Warsh’s path to the board is effectively barred.

While tradition dictates that an outgoing chair resigns from the Fed entirely, the law is on Powell’s side. His separate 14-year term as a governor does not expire until January 31 2028. If Powell refuses to step down as a governor, he remains a voting member of the board, blocking Warsh from taking his seat.

This Eccles playbook move – named after Marriner Eccles, an American economist and banker who served as the seventh chairman of the Fed from 1934 to 1948 and continued to serve as a member of board of governors until 1951 after being demoted by President Truman in 1948 – would allow Powell to remain in the building as a safeguard for the bank’s independence.

The most striking potential outcome involves the Federal Open Market Committee ( FOMC ), the body that actually sets interest rates. While the US president appoints the chair of the board, the FOMC is required by law to elect its own leader annually.

Historically, the FOMC has always elected the sitting board chair as its head. However, should a leadership void occur due to Senate gridlock, the FOMC could exercise its legal right to elect any of its members, including governor Jerome Powell, as its chair.

“Trump may be confusing tradition for regulation,” according to an analyst. “If the FOMC’s 12 voting members, including regional bank presidents, who are not presidential appointees, decide to protect the Fed from political interference, they could effectively keep Powell in charge of monetary policy.

However, another analyst says that although this scenario is legally possible, it is highly unlikely since the reality is that by tradition, the FOMC has always elected the board chair as its own chair.

“For the FOMC to elect Powell ( as a regular governor ) over a newly confirmed board chair ( like Warsh ),” the analyst notes, “would be an unprecedented mutiny by the regional bank presidents and other governors to protect Fed independence.”

In any case, for an administration desperate to lower interest rates, the sight of Jerome Powell continuing to wield the gavel at interest rate meetings through 2028 would be the ultimate irony. As the May deadline looms, the financial world is watching to see if the Fed’s complex rules will turn Trump’s takeover into a stalemate.