National Economic Council Director Kevin Hassett stated on Sunday that the Trump administration is “looking into” whether the president has the authority to fire Federal Reserve Chair Jerome Powell before his term ends next spring.
“But certainly, if there’s cause, he does,” Hassett said during an interview on ABC News’ This Week when asked about President Donald Trump’s power to remove Powell.
Although Trump has publicly stated that he does not want to remove Powell, Hassett’s remarks indicate that the White House is still considering the possibility.
Escalating Criticism Over Federal Reserve Renovations
Recent days have seen an increase in criticism from top Trump administration officials targeting Powell, particularly focusing on the Federal Reserve’s $2.5 billion headquarters renovation project. Hassett said the project has gone over budget by $700 million.
It’s important to note that taxpayers are not funding these renovations; the Federal Reserve is self-funded through its earnings on securities and fees charged to banks.
Office of Management and Budget Director Russell Vought last week accused Powell of “grossly mismanaging the Fed” and announced plans to seek an investigation into the renovation.
Vought’s actions suggest the administration may be preparing grounds to remove Powell before his term concludes.
Last week, Vought sent a series of detailed questions to Powell regarding the renovation project. Hassett said Sunday that the administration’s next steps will largely depend on the answers received.
Federal Reserve Responds and Future Leadership Speculation
The Federal Reserve responded quietly last week with an updated FAQ page on its website addressing many of Vought’s concerns. The page explicitly denies construction of new VIP dining rooms as alleged.
The webpage was posted on the same day Vought publicly called for a probe into Powell’s management of the project.
While Trump reiterated on Friday that he does not want to remove Powell, he has acknowledged having other candidates in mind for when Powell’s term expires in May.
Kevin Hassett himself is considered a leading candidate to replace Powell. Another potential contender is former Fed Governor Kevin Warsh, who recently appeared on Fox News and criticized the Fed’s management and monetary policy, describing the renovation spending as “outrageous” and indicative of the Fed having “lost its way.”
What The Author Thinks
The mounting political pressure and public accusations against Jerome Powell and the Federal Reserve’s renovation project risk politicizing an institution that must remain independent for the good of the economy. While fiscal responsibility is important, targeting Powell for operational matters could weaken the Fed’s ability to manage monetary policy effectively. Replacing a Fed chair amid controversy may destabilize markets and create uncertainty. A clear-eyed focus on the Fed’s core mission is essential in these times.
Featured image credit: NewsNation
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