The Fed’s drama is getting more and more interesting. Deutsche Bank recently put out a bold prediction: after Chairman Powell’s term ends in May 2026, he might not leave entirely, but instead stay on as a Board Governor and remain on the Federal Open Market Committee.

This might sound wild, but it’s completely legal. Powell’s governor term actually doesn’t expire until January 2028, and the Fed’s bylaws have never required that a departing Chair must also resign as a governor. Looking back at history, there’s precedent—Chairman Eccles, in his second term, did exactly this: after stepping down as Chair, he stayed on the Board, aiming to safeguard the Fed’s independence and prevent the White House from interfering at will.

The current situation is a bit tricky. In recent years, Trump’s attitude toward Powell has been clear to everyone—publicly calling for rate cuts and threatening to replace him is nothing new. If the new Chair is truly someone “obedient,” given Powell’s personality, he might very well choose to stay. Don’t forget, a governor has voting power on the FOMC, which is no small thing.

The question is whether markets can accept this arrangement. The U.S. Treasury Secretary has already warned that having a former Chair stay on the Board could cause confusion. Imagine this: the new Chair gives a policy statement, but the former Chair casts a dissenting vote—who should the markets listen to? With such mixed signals, traders might go crazy.

What does this mean for the crypto market?

First, uncertainty will rise significantly. If the Fed starts showing clear internal divisions, policy paths will be even harder to predict, and short-term volatility is almost inevitable.

Second, if Powell does stay on as a governor, he’s likely to act as a counterbalance against radical policies. Hopes that a new Chair will immediately start flooding the market with liquidity may need to be tempered. The dollar probably won’t weaken as much as some expect.

Most importantly, liquidity expectations will become even more complex. We’ll need to analyze not only the new Chair’s stance, but also how the “shadow Chair” might vote at critical moments.

By 2026, the Fed may no longer be a one-person show. This power game could end up being more important than the timing of rate cuts itself.