Trump Threatens to Fire Fed Chair If He Doesn't Step Down
Tensions between the White House and the Federal Reserve have ramped up again, with President Donald Trump warning he could remove Chair Jerome Powell if he doesn’t step aside when his term ends next month.
“Then I’ll have to fire him,” Trump said in a TV interview when asked about Powell potentially staying on temporarily. He added: “I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial.”
Powell’s current term as chair is due to expire on 15th May, but he has said he plans to remain in the role until a successor is confirmed. “That’s what the law calls for. That’s what we’ve done on several occasions,” he has said previously.
The situation has become more complicated because Trump’s pick to replace him, Kevin Warsh, is still waiting for Senate approval. A key Republican senator, Thom Tillis, has said he won’t support the nomination unless a federal investigation into Powell is dropped, effectively stalling the process.
At the centre of the dispute is an investigation into the Federal Reserve’s headquarters renovation project, which has ballooned to around $2.5 billion. Prosecutors recently made an unannounced visit to the site, though they were turned away and directed to not return without Fed lawyers. The investigation has focused on rising costs and Powell’s past testimony to Congress.
Despite the scrutiny, there’s been no clear evidence of wrongdoing. Some lawmakers have criticised the investigation, calling it unnecessary and poorly timed, especially as it risks delaying leadership changes at the central bank.
Trump, however, is standing firm. “Don’t you think we have to find out what happened there? I have to find out,” he said, rejecting calls to drop the investigation even if it slows down Warsh’s appointment.
The president has repeatedly attacked Powell over interest rates, accusing him of being too slow to cut them and boost the economy. He has also taken aim at the renovation project, saying: “It is probably corrupt, but what it really is, is incompetent.”
Meanwhile, Powell has pushed back against the pressure and made it clear he won’t step down while the investigation is ongoing. “I have no intention of leaving the Board until the investigation is well and truly over with transparency and finality,” he said.
The standoff raises bigger questions about the independence of the Federal Reserve. By law, a Fed chair can only be removed “for cause,” meaning proven misconduct, which is something that remains unclear in this case.
With a Senate hearing on Warsh’s nomination scheduled and the deadline for Powell’s term fast approaching, the coming weeks could decide not just who leads the Fed, but how much influence the White House can exert over it.
