President Donald Trump insisted on Wednesday that he has no plans to fire Federal Reserve Chair Jerome Powell, despite a Department of Justice investigation into renovations at the Federal Reserve headquarters.
Trump, however, said he may announce a replacement candidate in the coming weeks, fueling debate over the central bank’s independence.
The DOJ inquiry centers on renovation contracts at the Fed’s Washington headquarters. Powell has called the investigation a political maneuver aimed at pressuring monetary policy, while Trump has repeatedly criticized Powell, calling him “either incompetent or corrupt.”
Under federal law, members of the Board of Governors can only be removed “for cause”, not over disagreements about interest rate decisions, raising legal questions about any potential attempt to force Powell out.
Despite denying immediate intentions to dismiss Powell, Trump confirmed he is considering alternative candidates. He praised two potential nominees: Kevin Hassett, a former White House economic adviser, and Kevin Warsh, a former Fed governor. “Both are very good,” Trump said, adding that he expects to announce his choice within the next two weeks.
Trump’s plans face political hurdles: Republican Senator Tom Tillis of North Carolina has threatened to block any Fed nominations until the DOJ investigation concludes, heightening tensions between the White House and Congress.
Powell warned lawmakers that the investigation represents a dramatic escalation in White House pressure on the central bank. “The issue is whether the Fed will continue to set interest rates based on evidence and economic conditions, or whether monetary policy will be directed through political intimidation,” he said in congressional testimony.
The controversy underscores ongoing concerns over the independence of the Federal Reserve, as Trump evaluates options for his term’s end in May while weighing potential successors who could shift U.S. monetary policy direction.
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