Trump Pledges To Fire Powell As His Nominee For Fed Chair Nears A Hearing Date

President Donald Trump set the stage for a standoff at the Federal Reserve, promising Wednesday to fire Chairman Jerome Powell if he didn’t resign at the end of his term in the top spot on May 15. 

The president’s statement was the latest in a series of broadsides against Powell, and it came a day after Kevin Warsh, the president’s nominee to take up the helm at the Fed, cleared a key hurdle ahead of confirmation hearings.

It also follows a surprise appearance of federal prosecutors at under-construction Fed offices at the center of a Department of Justice investigation that Powell has said will keep him from leaving the central bank. 

The comments amount to an escalation of the high-stakes posturing from Powell and the White House in a fight over interest rates that has raised questions about the central bank's independence, considered a cornerstone of any sound monetary policy. 

Powell committed to staying on at the Fed through the federal investigation at a press conference after the central bank's vote in March to hold rates flat. His term as chairman is up next month, but Powell has been confirmed by the Senate to stay on as a Fed governor through 2027.

Trump made the comments in an interview that aired Wednesday on Fox Business after being reminded of Powell’s pledge.

“Well, then, I'll have to fire him, OK?” the president said.

The statement is far from the first time Trump has threatened to oust Powell, whom the president previously nicknamed “Too Late” in social media attacks over the chairman’s perceived unwillingness to cut interest rates, and it isn’t clear that the president can legally fire a Fed governor at his choosing.

But the threats carry more weight after Warsh submitted required financial disclosures to Congress, and Senate Banking Committee Chairman Tim Scott, a Republican from South Carolina, said Tuesday that the committee would hold a confirmation hearing next week.

Warsh’s path out of the Senate isn’t clear, however, with North Carolina Republican Sen. Thom Tillis vowing to withhold his support until the Justice Department investigation is concluded. Without Tillis, Warsh needs at least one Democrat to clear the Banking Committee. 

If Warsh isn’t confirmed by May 15, Powell said he intends to stay on as acting chief. 

“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,” he said after last month's vote. 

It’s not clear if Trump’s pledge to oust Powell was in reference to his role as chairman or his position on the Fed’s board of governors more broadly, and several economists have argued that the White House could attempt to nominate an acting chair to replace Powell. 

It also isn’t clear what power the White House has to oust central bank governors more generally, with the Supreme Court debating whether the president can fire Fed Governor Lisa Cook.

Trump tried to oust Cook in August after a campaign from Republicans, including some inside his administration, accusing her of mortgage fraud. The Fed has maintained that a governor can’t be fired without cause, and Cook has refused to leave her post and continued to vote on interest rate decisions. 

Trump posted a letter on Truth Social that argued the Federal Reserve Act of 1913 gave him cause to fire Cook because “there is sufficient reason to believe [she] may have made false statements on one or more mortgage agreements.”  

The Supreme Court heard oral arguments for the case in January and appeared skeptical of the Trump administration’s position. A ruling is expected in the early summer. 

The Justice Department probe into the Federal Reserve and Powell came after Bill Pulte, the director of the Federal Housing Finance Agency, and other administration allies accused Powell of lying to Congress in Senate testimony about an over-budget renovation of the Fed’s headquarters. 

Jeanine Pirro, the U.S. attorney for the District of Columbia and a former Fox News personality, is leading the investigation, and prosecutors appeared without warning at the Fed’s headquarters on Tuesday seeking a tour of the construction site, The Washington Post reported. 

The investigators were told they needed prior clearance and were referred to the Fed’s legal team. But the attempt to gain access to the site is a signal that Pirro is continuing to dig into the allegations that Powell misled Congress about the scope of and delays at the $2.5B renovation. 

After the probe was publicly launched in January, Powell issued a rare public statement posted to the Fed’s website. 

“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said in the video, calling that a pretext to attack the Fed for not easing interest rates.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation,” he said.