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President Trump has threatened to fire Federal Reserve Chair Jerome Powell if he doesn’t leave when his term as chair expires on May 15.
Some shit you should know before you dig in: If you’re unaware, President Trump and Chairman Powell have been at each other’s throats for years over interest rates, with Trump repeatedly pushing for cuts that Powell has refused to make. Trump originally appointed Powell in 2017 and has since called him a “knucklehead,” a “disaster,” and accused him of doing a “lousy job.” The current flashpoint is a Department of Justice criminal investigation into the Fed’s $2.5 billion renovation of its Washington headquarters (a project Trump claims could have been done for $25 million and calls corrupt). Powell has pushed back hard, calling the investigation politically motivated, and said he won’t leave the Fed until his term is up. A federal judge has already quashed the DOJ’s subpoenas in the case, and in March a federal prosecutor admitted the investigation had turned up no evidence of a crime.
What’s going on now: In a Fox Business interview on Wednesday, Trump said, “I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial….If he’s not leaving on time….then I’ll have to fire him.” Powell’s chairmanship ends May 15, but his seat on the Fed’s board runs through January 2028, and he hasn’t committed to leaving once his time at the helm is up.
Trump’s nominee to replace Powell, former Fed Governor Kevin Warsh, has a confirmation hearing scheduled before the Senate Banking Committee on April 21 (but North Carolina Senator Thom Tillis has said he will block the nomination until the Powell investigation is finished). This could leave the door open for Powell to possibly stay on as chair in an interim capacity if Warsh isn’t confirmed in time.
Trump said he’s hopeful Tillis falls in line, saying the senator “is an American….he knows what to do.” But he made clear he won’t drop the investigation to speed things along. “Does that mean we stop a probe of a building that I would have done for $25 million that’s going to cost maybe $4 billion? I have to find out,” he said.
Firing Powell would be legally murky. Under the Federal Reserve Act, the president can only remove Fed officials “for cause,” and Powell (a lawyer himself) has repeatedly said Trump does not have the authority to fire him.
This all comes as Treasury Secretary Scott Bessent said Wednesday he was optimistic Warsh would be confirmed on time and the firing question would become irrelevant.
