Washington (United States) (AFP) – President Donald Trump renewed pressure Wednesday on Federal Reserve Chair Jerome Powell, with the US leader threatening to fire the central bank chief if he stays beyond his mandate. Powell’s term at the helm of the Fed expires on May 15, although he can remain in his role as chairman if no successor has been confirmed. The central banker also said last month that he would not leave his post as a Fed governor until a Justice Department investigation involving him is “well and truly over, with transparency and finality.” It is rare for a former Fed chair to remain on its board after their term as chief expires. Powell’s Fed governor term expires in 2028.
“I’ll have to fire him,” Trump told Fox Business, if Powell “is not leaving on time.” The president added: “I’ve wanted to fire him.” Trump has repeatedly lashed out at Powell over the past year for not cutting interest rates more aggressively. The Trump administration has taken aim at the independent Fed on several levels, initiating an investigation into Powell over renovation cost overruns at the bank and seeking to oust another Fed governor, Lisa Cook.
On whether he would drop the Department of Justice probe involving Powell, Trump said: “I’m not playing. I have to find out.” Trump has named former central banker Kevin Warsh to succeed Powell, but he must be confirmed by the US Senate before taking up the role. Warsh has a confirmation hearing before the Senate Banking Committee next Tuesday. However, he faces an uphill battle with some lawmakers criticizing the DOJ probe as political pressure on the central bank. Senator Thom Tillis — a member of Trump’s Republican party who sits on the Senate Banking Committee — has vowed to hold up the nomination as long as the investigation remains unresolved.
“I hope that everyone will work to have (Warsh) there on May 16,” US Treasury Secretary Scott Bessent told a CNBC event on Wednesday, referring to the day after Powell’s term as chairman expires. On the impasse, Trump’s top economics adviser Kevin Hassett told an Axios event: “They’ll work something out.” “I have high confidence that that will happen,” he said on the sidelines of the IMF and World Bank’s spring meetings in Washington.
“It’s very hard to figure out what rational motive President Trump can have for prolonging this investigation of Jay Powell if it’s going to delay the confirmation of Kevin Warsh,” said David Wessel, a senior fellow at Washington think tank the Brookings Institution. Wessel added that if Trump got US Attorney Jeanine Pirro “to back off,” which observers believe he has the power to do, that would clear the way for Powell’s departure and Warsh’s confirmation. Powell first took the helm of the Fed during Trump’s first presidency in 2018 and was reappointed to the position under Democrat Joe Biden in 2022.
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