Trump threatens to fire Powell, won’t halt probe of Fed renovations
Trump also refused to distance himself from the Justice Department’s criminal probe into the Fed’s $2.5 billion office renovation, which prosecutors have used to ratchet up pressure on the Fed.
President Donald Trump on Wednesday threatened to fire Federal Reserve Chair Jerome H. Powell if he does not step down from the central bank, renewing his attacks on a Fed chief he has long accused of keeping interest rates too high.
“Well, then I’ll have to fire him, OK?” Trump said on Fox Business about Powell’s tenure as chairman, which ends May 15. “If he’s not leaving on time.”
Trump also refused to distance himself from the Justice Department’s criminal probe into the Fed’s $2.5 billion office renovation, which prosecutors have used to ratchet up pressure on the Fed even as the department’s legal case has faced legal and political headwinds. Trump declined to direct the Justice Department to stand down from the investigation, which a federal judge last month found to be part of a broader White House pressure campaign against the Fed.
“Whether it’s incompetence, corruption, or both, I think you have to find out,” he said, referring to the renovation inquiry. “I have to find out.”
The comments came a day after prosecutors from the U.S. Attorney’s Office in Washington appeared without warning at the Fed’s headquarters seeking a tour of an active construction site — the latest escalation in a pressure campaign that has raised alarm among central bank watchers.
The central bank has denied any wrongdoing in the renovation, and a federal judge last month quashed a pair of grand jury subpoenas, finding that prosecutors had no evidence of a crime.
Trump’s threat to fire Powell also raised immediate legal questions. Fed governors generally cannot be removed except for cause, and Powell has said he has no plans to leave the agency until the probe is finished.
The administration is already trying to fire another Fed governor, Lisa Cook, over alleged mortgage fraud. But the Supreme Court, which is considering the matter, has signaled she can stay in her position while she fights the attempted dismissal. She denies wrongdoing.
Wednesday’s comments were also a fresh complication for Kevin Warsh, the former Fed governor Trump tapped in January to replace Powell. Trump shrugged off suggestions that the Justice Department inquiry could imperil Warsh’s confirmation.
The Senate Banking Committee set a Tuesday hearing to consider Warsh’s nomination. But even with the hearing, the timing of Warsh’s confirmation is uncertain. Sen. Thom Tillis of North Carolina, a key Republican, has said he will not vote for any Fed nominees until the probe is resolved, effectively blocking Warsh from advancing out of the banking panel. The panel’s chairman, Sen. Tim Scott (R., S.C.), said he expected U.S. Attorney Jeanine Pirro’s investigation would end in the coming weeks.
Asked about Tillis’ effective blockade of Warsh, Trump suggested the senator might capitulate. “He doesn’t want the legacy of having an incompetent guy stay there for longer than is necessary,” Trump said Wednesday.
Republican senators have signaled they do not believe Tillis will bend. “At some point, they’re going to have to deal with the committee and they’re going to have to deal with Tillis,” Senate Majority Leader John Thune (R., S.D.) told reporters Wednesday, referring to the banking panel. “I think it’s in everybody’s best interest to wrap up the investigation.”
Although Powell’s tenure as chairman expires in mid-May, he can elect to stay on as one of seven Fed governors through early 2028. Powell has said he plans to hold over as acting Fed chief if there are delays to Warsh’s confirmation.
Past administrations have also pressured the central bank, whose independence rests both on federal law and on norms that most recent presidents, wary of rattling financial markets, have been reluctant to test.
Even so, no modern president has gone as far as Trump in both openly talking about firing a sitting Fed chair while repeatedly demanding sharp rate cuts in public. Trump’s efforts to fire Cook are the first time a president has attempted to fire a sitting governor in the 112-year history of the central bank.