President Donald Trump issued a sharp ultimatum to Federal Reserve Chair Jerome Powell on Wednesday, declaring his readiness to fire the central bank leader if he refuses to vacate his position by May. The President told Fox Business that he "hates to be controversial" but insisted that the transition must occur to maintain the integrity of the institution.
The escalating conflict centers on Powell's refusal to step down before a Department of Justice investigation into the Federal Reserve’s headquarters construction is concluded. Trump clarified that the DOJ probe into construction irregularities will not end regardless of whether Powell remains in his current role.
Powell has remained firm in his stance, stating publicly that he has no intention of resigning until the federal inquiry into the $2.5 billion renovation project is fully resolved. This defiance has frustrated the White House, which has already nominated Kevin Warsh to take over the role once Powell's term officially expires on May 15.
Trump told host Maria Bartiromo that he has "held back" on firing Powell in the past but suggested his patience has finally reached its limit. He argued that the central bank requires new leadership to align with his administration's economic goals and criticized Powell's current performance.
Legal experts note that the President's authority to remove a Federal Reserve Chair is limited by statutes that require "cause," such as legal or ethical misconduct. The administration appears to be leveraging the DOJ investigation as a potential justification for such a high-profile dismissal before the term ends.
Financial markets showed signs of volatility following the President's remarks as investors weighed the implications of a forced removal. Analysts warned that a direct confrontation between the executive branch and the Fed could undermine the institution's perceived independence and global economic stability.
Republican Senator Thom Tillis has further complicated the transition by stating he will not vote to confirm any successor until the DOJ probe is finished. This legislative hurdle has emboldened Powell to remain in his post, setting the stage for a significant constitutional and political showdown.
As the May deadline approaches, the standoff represents the most significant challenge to the Federal Reserve's autonomy in decades. The outcome of this power struggle will likely define the relationship between the White House and the central bank for the remainder of Trump's second term.