Trump Warns Powell: "If He Doesn't Leave the Fed, I'll Fire Him"...No Acting Chair Role Either

New York (The Financial News) – Reporter Lee Byung-chulU.S. President Donald Trump has increased pressure on Federal Reserve (Fed) Chair Jerome Powell by openly raising the possibility of firing him. Trump also stated that he would not halt the criminal investigation related to the remodeling of the Fed’s Washington, D.C. headquarters. His stance is seen as an attempt to block any scenario in which Powell stays on, even temporarily, if confirmation of Trump’s chosen successor, Kevin Warsh, is delayed by opposition within the Republican Party.
In an interview with Fox Business on the 15th (local time), Trump said, "If he (Powell) does not step down on time, I will have no choice but to fire him." He added, "I wanted to fire him before, but I held back, and I do not want more controversy."
The core issue is what happens to Powell after his term as chair ends. His term as Fed chair expires on May 15, but his term as a member of the Board of Governors runs until 2028. Unlike past practice, where outgoing chairs left the Fed after handing over to their successors, Powell has left open the option of remaining. He has argued that if Warsh, whom Trump has nominated as his successor, is not confirmed by his departure date, he can stay on as chair based on precedent.
Warsh will formally enter the confirmation process next week, starting with a hearing in the United States Senate, but several hurdles remain before he can be sworn in. Republican Senator Thom Tillis has declared that he will block the process until the investigation into Powell is completed. The United States Senate Committee on Banking, Housing, and Urban Affairs, which handles the nomination, has 23 members: 11 Republicans and 12 Democrats.
The investigation surrounding Powell stems from his testimony at a Senate Banking Committee hearing in June last year. At that time, Powell explained the cost, scope, and design changes of the Fed’s Washington headquarters remodeling project. Later, however, some alleged that his statements did not match internal documents. Critics say he downplayed or failed to fully explain the scale of cost increases and whether the project was expanded, raising the question of whether he made false or misleading statements to Congress. The Trump administration has used this as grounds to continue the probe, but the courts have temporarily put limits on it. Tillis insists that this issue must be resolved before a new chair can be installed.
Trump, however, made clear that he will not call off the investigation. "We have to find out what happened," he said, adding, "Whether it was incompetence, corruption, or both, I think we absolutely need to get to the bottom of it." The District of Columbia attorney general leading the probe made an unannounced visit to the Fed remodeling site on the 14th.
Trump’s remarks are being interpreted as a signal that he will not tolerate a situation in which Powell continues to serve as acting chair if Warsh’s confirmation is delayed. Under the Federal Reserve Act, the incumbent chair can remain in the role until a successor is in place. If Trump tries to appoint a separate acting chair, however, it could trigger a legal clash. Some observers speculate that he could name Stephen Miran, a member of the Federal Reserve Board of Governors, as acting chair. Miran, who previously served as chair of the Council of Economic Advisers at the White House before moving to the Fed, has strongly advocated interest rate cuts in line with Trump’s policy stance.
Ultimately, the clash is expanding beyond a simple personnel dispute into a broader "power struggle over interest rate policy." With energy prices surging due to war and fears of an economic slowdown growing at the same time, the Fed’s policy direction and its independence have emerged as key variables for global financial markets.




pride@fnnews.com Reporter Lee Byung-chul Reporter