Jerome Powell’s seat as chair of the Federal Reserve just keeps getting hotter.
On Sunday, President Donald Trump kept up his pressure campaign against Powell, saying it would be a “great thing” if the Fed chair stepped down and that Powell is “very bad for the country.” Trump told reporters that the U.S. should have “the lowest interest rates on earth,” but Powell refuses to lower them. That is costing the nation’s economy hundreds of billions of dollars, according to Trump.
The Fed chair has faced a barrage of criticism in recent months from Trump and members of his administration due to his reluctance to lower interest rates. Powell has maintained a wait-and-see attitude about lowering rates, saying that the overall economy and the jobs market both remain strong, but inflation remains above the Fed’s goal of 2%.
Powell also has spoken of his concerns that Trump’s tariff campaign against trading partners may prove to be inflationary. Most Wall Street economists expect that the planned tariffs could lift inflation to about 3% to 3.5% by the end of this year, according to The Associated Press.
While Trump has threatened in the past to fire Powell, it doesn’t appear that he has the legal right. In May, the Supreme Court ruled that the Federal Reserve is a “uniquely structured entity” with a “distinct historical status,” and members can only be removed for cause.
But that hasn’t stopped the administration from offering blistering critiques of the Fed chair. Kevin Hassett, the director of the White House’s National Economic Council, also took aim at Powell on Sunday, saying the Trump administration is continuing to investigate whether the president has the authority to fire Powell.
Hassett, who was interviewed on ABC’s “This Week” news program, said the issue of Trump’s authority to fire Powell was “being looked into” by the White House. “But certainly, if there’s cause, he does,” Hassett said.
Members of Trump administration have recently seized on Powell’s handling of a renovation project at the Federal Reserve headquarters in Washington, D.C., which was originally budgeted for $1.9 billion, but has grown to $2.5 billion due to cost overruns. White House Budget Director Russell Vought posted a two-page letter to Powell on the social media site X that accused the Fed chair of fiscal mismanagement of the Fed’s operating budget.
Vought maintains major design elements of the project are out of compliance with the plan approved by the National Capital Planning Commission. He wrote that Powell’s testimony before the Senate Committee on Banking, Housing and Urban Affairs in June raised serious questions.
In response to the ongoing controversy about the renovation budget, Powell has reportedly asked the central bank’s inspector general Michael Horowitz to review the costs of the headquarters project and any other related matters that Horowitz deems appropriate, according to recent Axios report.
