Donald Trump threatened to fire Jerome Powell if he stays on as US Federal Reserve chair past the end of his tenure and doubled down on a criminal investigation into renovations of the central bank’s headquarters.
As the White House pushes Trump’s new nominee to take charge of the Fed, Kevin Warsh, Powell has a month left in the role. The possibility of Powell staying on as chair past 15 May, the official end of his term, has grown amid mounting scrutiny of Trump’s approach to the Fed in the Senate, which is required to approve Warsh’s nomination.
“I’ll have to fire him, OK, if he’s not leaving on time,” Trump said of Powell during an interview on Fox Business. “I’ve held back firing him. I wanted to fire him, but I had to be controversial, you know? I want to be uncontroversial.”
Trump reiterated his claim that Powell is doing a “bad job” and that “he should be lowering interest rates” – an argument Trump has made repeatedly since returning to office in January 2025, placing him on a collision course with the slow, careful approach taken by Powell and other economists at the Fed.
In January, Trump announced Warsh, a former Fed governor, as his new nominee for central bank chair. Warsh has been critical of the Fed for keeping rates too high, leading many to believe that he’ll bow to Trump’s demands for rate cuts once confirmed.
Warsh’s nomination hearing in front of the Senate banking committee is scheduled for 21 April, but it remains unclear whether Senate Republicans will have enough votes to move his nomination forward.
Thom Tillis, a Republican senator from North Carolina and a member of the banking committee, said he will block Warsh’s nomination until the Department of Justice ends its criminal investigation into Powell over renovations at the Fed’s headquarters in Washington DC. Tillis has said that he supports Warsh’s nomination but said the Powell investigation is “reaching the point of absurd”.
The investigation appears to be ongoing. Prosecutors showed up unannounced on Tuesday at the construction site for the Fed’s renovations, the Wall Street Journal reported, citing an unnamed source and a letter.
Trump went on a lengthy tangent during the Fox interview about the Fed’s renovations, alleging without evidence that it “is probably corrupt, but what it really is is incompetence”, and seemed unfazed by the possibility that Tillis could block Warsh’s nomination over the investigation.
“Does that mean we stop a probe of a building that I could’ve done for $25m that’s going to cost maybe $4bn? Don’t you think we have to find out what happened there?” he said. “Whether it’s incompetence, corruption or both, I think you have to find out.”
In January, Powell issued a rare rebuke to Trump and called the investigation a “pretext” connected to the Fed’s refusal to abide to the president’s wishes and lower interest rates.
“The Fed, through testimony and other public disclosures, made effort to keep Congress informed about the renovation project,” Powell said at the time. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic condition – or whether instead monetary policy will be directed by political pressure or intimidation.”
Even if Trump plans to fire Powell, it’s unclear whether the supreme court will allow him to do so. The court still has to issue a ruling on Trump’s firing of Fed governor Lisa Cook last summer. In oral arguments in January, justices on the court, including in its conservative bloc, seemed skeptical of the president’s ability to fire a member of the Fed’s board without cause and investigation.
