President Donald Trump said Wednesday he was prepared to fire Federal Reserve Chair Jerome Powell if the central bank chief doesn’t step down when his term expires on May 15.
“I’ll have to fire him, OK, if he’s not leaving on time. I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial,” Trump said in an interview on Fox Business.
Trump’s pick to replace Powell, former Fed governor Kevin Warsh, has yet to be confirmed. That opens the door to Powell staying on temporarily.
Under Fed regulations, the chair can serve “pro tempore” if a successor hasn’t been installed. Powell served in that capacity for several months in early 2022 while awaiting confirmation to his second term. He has also said he intends to stay on as governor until a Department of Justice investigation is resolved.
“I have no intention of leaving the Board until the investigation is well and truly over with transparency and finality,” Powell told reporters at the Fed’s March press conference.
Warsh is scheduled for a confirmation hearing before the Senate Banking Committee on April 21, but his path forward is far from clear. Sen. Thom Tillis, a North Carolina Republican whose vote the party needs to advance the nomination, refuses to support any Fed nominee while the Justice Department pursues a criminal investigation into Powell.
The probe is focused on Powell’s congressional testimony about the cost of renovating the Fed’s aging headquarters. A federal judge quashed the subpoenas in March, finding no credible evidence of wrongdoing and writing that the effort appeared designed to harass Powell into resigning. Prosecutors say they’ll appeal, but that legal battle will likely take months if not longer.
Still, the investigation showed no signs of cooling on Tuesday, when officials from U.S. Attorney Jeanine Pirro’s office made an unannounced visit to the Fed’s headquarters construction site, saying they wanted a tour and to check on progress. They were turned away.
The visit came the same day the Banking Committee announced Warsh’s hearing date, a coincidence that raised eyebrows on Capitol Hill. Pirro has said she intends to press forward regardless of the effect on confirmation, calling the political fallout “white noise.”
Trump said Wednesday he was hopeful the Banking Committee would confirm Warsh next week, even though Tillis has vowed to hold out.
Treasury Secretary Scott Bessent also waded into the debate on Tuesday, speaking at both the Institute of International Finance and a WSJ Opinion Live event. He said he wasn’t sure about the mechanics of the transition or whether Powell could remain as acting chair and suggested that Vice Chair Philip Jefferson or Fed Governor Christopher Waller could take the reins if Warsh isn’t approved by the Senate in time.
He said the Fed needs to cut rates but understands if officials want to wait for clarity given the Iran war and elevated oil prices. He also suggested the market could wait for Warsh to lead the next rate cycle, a signal that the administration sees the current policy standoff as temporary even as the political fight drags on.
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