Trump ally says administration is looking into firing the Fed chair
The prospect of President Trump removing Federal Reserve chair Jerome Powell from his post has gained traction, with White House National Economic Council director Kevin Hassett stating that the president’s authority to do so is “being looked into.”
In an interview on ABC News’ This Week, Hassett affirmed that Trump “certainly” has the ability to fire Powell if “there’s cause.” This comes amidst months of escalating tension between the administration and the Fed over interest rates.
Renovation probe fuels speculation
The discussion of Powell’s potential ouster has been fueled by a White House investigation into alleged cost overruns on a $2.5 billion renovation of the Federal Reserve’s Washington headquarters. White House Budget director Russell Vought has criticized the project, sending a letter to Powell expressing Trump’s concern over “mismanagement of the Fed under that chairman.”
Vought’s probe is widely seen as a potential pathway for the White House to establish “cause” for Powell’s removal, despite Trump’s previous assertions that he had no plans to cut short Powell’s term, which ends in May 2026.
Calls for resignation and investigation
Adding to the pressure, Bill Pulte, chairman of Fannie Mae, expressed encouragement over “reports that Jerome Powell is considering resigning,” stating it “will be the right decision for America, and the economy will boom.”
Pulte’s comments follow his recent urging for Congress to investigate Powell, accusing him of misleading the Senate Banking Committee regarding the renovation costs. Powell, however, has maintained that the Fed’s decision to hold off on interest rate cuts is due to uncertainty surrounding the impact of the president’s tariffs, noting that “someone has to pay the tariffs.”
Independence of the Fed questioned
The ongoing friction raises significant questions about the independence of the Federal Reserve, a cornerstone of global finance. While the Supreme Court in May allowed the president to fire members of independent federal agencies, it indicated that the decision might not apply to the Federal Reserve due to its “uniquely structured, quasi-private entity” status.
According to reports from Politico and NBC News, critics suggest that using the renovation costs as a pretext for dismissal, especially given Trump’s consistent public criticism of Powell's interest rate policies, would be “obviously, totally pretextual” and could undermine investor confidence in the institution’s autonomy.
