President says he'll try and oust Powell if he remains on Fed's Board of Governors after his successor as chair is confirmed
President Donald Trump’s renewed threat to fire Federal Reserve chair Jerome Powell if he does not leave “on time” sharpens long‑running tensions between the White House and the central bank. It also raised fresh questions over how political pressure could feed through to interest rates and mortgage markets.
Legal scholars long pointed out that the Fed chair’s removal protections were murky, with Section 10 of the Federal Reserve Act allowing governors to be removed only “for cause” – a term historically linked to malfeasance or serious neglect of duty, not policy disagreements over rates or asset‑purchase programs.
In his latest broadside, Trump linked Powell’s fate directly to a Justice Department probe into cost overruns on the Fed’s headquarters renovation and suggested he is prepared to act if Powell remains on the Board of Governors after his successor, former Fed governor Kevin Warsh, is confirmed.
“Well then, I’ll have to fire him, OK? If he’s not leaving on time,” Trump said in an interview on Fox Business.
“I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial.”
As Jerome Powell’s term winds down, Kevin Warsh’s nomination is moving toward hearings, but political roadblocks and an ongoing investigation into the Fed are adding uncertainty to the outlook for rates and markets.https://t.co/hL1EYhJdNP
— Mortgage Professional America Magazine (@MPAMagazineUS) April 14, 2026
Trump also framed the criminal investigation into the construction project as a test of competence at the institution that sets US monetary policy.
“Whether it’s incompetence, corruption, or both, I think you have to find out,” he said, referring to the rising renovation bill.
He later added: “What they’ve done to that so it is probably corrupt, but what it really is is incompetent, and we have to show the incompetence of that.”
Claims that the project could have been done for $25 million instead of “maybe $4 billion” and that cost overruns were “almost 80%” were allegations from Trump and prosecutors.
Powell's term as chair is due to end on May 15 while his term as governor runs until 2028. He signaled he would not leave the Board while the renovation probe and a related Supreme Court fight over the attempted removal of governor Lisa Cook remains unresolved. He said he would serve as chair pro tem if necessary.
“That is what the law calls for, that’s what we’ve done on several occasions – including involving me – and that’s what we’re going to do in this situation,” Powell said.
He also insisted he would stay until the investigation is “well and truly over, with transparency and finality.”
For mortgage professionals, the clash landed against a backdrop of already elevated borrowing costs and a housing market still grappling with “lock‑in” from ultra‑low pandemic‑era loans.
Originators already warned that even talk of leadership change at the Fed – from debates over Powell’s future to speculation around Warsh – risks whipsawing expectations for rate relief and adding another layer of uncertainty to pipeline and pricing decisions.
Instead of nudging officials toward easier policy, Powell’s criminal investigation could make the Fed more cautious about cutting rates, an economist at Oxford Economics argued.
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