Kevin Hassett, Director of the White House National Economic Council, has stated that he expects the Justice Department's criminal investigation into Federal Reserve Chairman Jerome Powell "will yield no substantive results," as he believes Powell's previous testimony regarding the Fed's office renovation project was truthful.
Speaking in an interview on Fox Business Network on the morning of the 16th, Hassett expressed his hope that the Federal Reserve would be "more transparent" in its congressional testimonies. "Every corner of the government, the Fed, the White House, all agencies have a responsibility to be transparent with the American people," Hassett said. "If I were the Fed Chairman, I would insist on transparency, and I would probably answer these questions immediately."
He further commented, "But ultimately, I expect—Jay is a good man—I expect this to amount to nothing, and the cost overruns should be related to issues like asbestos abatement, as he said. But I do wish the Fed had been more transparent from the start."
According to prior media reports, the Fed's office renovation project was approved in 2017, with construction commencing in 2022. The budget for the project ballooned from an initial $1.9 billion to nearly $2.5 billion. Former President Donald Trump has claimed the actual cost reached $3.1 billion, alleging issues such as luxurious fittings. The Fed has denied these allegations, stating that the additional expenses were primarily due to increases in labor and material costs, as well as the removal of asbestos from the original building.
Since returning to the White House at the beginning of 2025, Trump has consistently pressured the Fed to implement significant interest rate cuts, aiming to stimulate the economy and reduce government debt servicing costs. Dissatisfied with the Fed's perceived lack of cooperation, Trump has repeatedly called for Powell's resignation. Powell's current term is set to conclude in May of this year.
In a statement posted on the Fed's website late on the 11th, Powell revealed that the Justice Department had served a subpoena to the Fed on the 9th, threatening criminal prosecution concerning his testimony before the Senate Banking Committee in June 2025. The investigation focuses on the cost overruns of the Fed's office renovation, with prosecutors suspecting Powell may have "lied" under oath. This move has drawn criticism from various quarters, including several Republican lawmakers, who view it as an attempt to undermine the Fed's independence.
Previously, media forecasts had identified Hassett as one of the leading candidates to succeed Powell. However, in remarks at the White House later on the 16th, Trump hinted that he prefers to keep Hassett in his current role rather than nominate him for the next Fed Chair.
Following Trump's comments, prediction platforms such as Kalshi and Polymarket showed a significant shift. The probability of former Fed Governor Kevin Warsh receiving the nomination surged from just over 40% to around 60%, while Hassett's chances dropped from approximately 35% to about 15%.
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