President Donald Trump escalated his feud with Federal Reserve Chair Jerome Powell on Wednesday, vowing to fire him if he does not resign when his term as chair expires on May 15. The threat, made during an interview on Fox Business, centers on a contentious criminal investigation into Powell’s handling of a $2.5 billion renovation project at the Fed’s Washington, DC headquarters.
The investigation, led by U.S. Attorney for the District of Columbia Jeanine Pirro, has accused Powell of misleading Congress about the project’s costs, which have ballooned nearly 80% over the original budget. Trump called the overruns a display of “incompetence” and insisted the probe must continue, even if it delays the confirmation of his nominee to replace Powell, former Fed Governor Kevin Warsh.
“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?” Trump said in a White House interview.
Powell, whose term as chair ends next month, can remain in a temporary “pro tempore” capacity until Warsh is confirmed by the Senate, per Fed regulations. He also has the option to stay on as a governor until 2028. In March, Powell told reporters he would not leave the board until the investigation reaches “transparency and finality,” emphasizing his duty to the institution and the public.
Legal hurdles are mounting for prosecutors. A federal judge last month quashed subpoenas issued to the central bank, a ruling Pirro plans to appeal, while an unannounced visit by two prosecutors to the Fed’s headquarters this week was rebuffed by the bank’s legal counsel. Robert Hur, representing the Fed, instructed them not to return without a Fed lawyer present.
Senate confirmation of Warsh, scheduled for a hearing on April 21, faces resistance from North Carolina Republican Senator Thom Tillis, a key member of the Banking Committee. Tillis has vowed to block the nomination until the probe concludes, raising the likelihood of a prolonged standoff. Trump expressed hope that Tillis would relent but acknowledged the investigation could derail his timeline to seat Warsh by mid-May.
The clash has reignited concerns over the Fed’s independence, a cornerstone of U.S. monetary policy. Trump’s repeated criticism of Powell, including past calls for lower interest rates and labeling him a “disaster” for the economy, adds fuel to the tension. The president’s confidence in Warsh to deliver on rate cuts contrasts sharply with Powell’s current tenure.
Beyond Powell, Trump’s administration has a history of challenging Fed officials, including an unsuccessful attempt last year to replace Governor Lisa Cook over alleged mortgage improprieties, a case now pending before the U.S. Supreme Court. The ongoing renovation probe, with costs now estimated as high as $4 billion, remains the focal point of the current battle, casting a shadow over the central bank’s leadership transition.
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