President Donald Trump continued his pressure campaign on the Federal Reserve on Thursday, signaling his support for the investigation of the central bank's chair, Jerome Powell.
Trump's remarks, however, could escalate the legal feud that is threatening to derail the confirmation of his chosen successor for Fed chair and extend Powell's tenure well beyond its scheduled end.
Powell said Wednesday he won't leave the Fed until the Justice Department's investigation of him is over, and a continuation of the probe could also have a negative domino effect for Trump's nominee for Fed chair, Kevin Warsh.
Speaking during an Oval Office news conference Thursday, Trump lambasted Powell and again alleged criminal wrongdoing in the costly renovation of the Fed's Washington headquarters, which is at the heart of the Justice Department's investigation into Powell and the central bank.
The Fed and its chair have denied any allegations of wrongdoing. The Fed declined to comment on the president's latest remarks.
But Trump made it clear Thursday he has no intention of backing down from his campaign to discredit Powell, whom he has repeatedly criticized for the Fed's not lowering interest rates further. If anything, the president pushed back harder, questioning the cost of the Fed's building renovation.
"I could have done that building and made it beautiful for $25 million," he said.
The remarks appear to be a notable shift from the White House's previous posture that the probe was a Justice Department matter, independent of the president.
Just last week, a federal judge handed the administration a significant legal setback, quashing the department's subpoenas targeting Powell and finding the government had produced "no evidence whatsoever that Powell committed any crime other than displeasing the president."
Thursday's escalation appears aimed, at least in part, at U.S. Attorney Jeanine Pirro, who said Friday she would appeal the ruling. The Justice Department didn't immediately respond to a request for comment.
The investigation's duration has direct consequences for the White House's Fed agenda: As long as the investigation remains active, Powell says he won't leave. His term as Fed chair expires May 15, but his term as a sitting board governor runs to January 2028, and nothing in the law requires him to go when a successor is sworn in.
If Warsh isn't confirmed before Powell's term expires in May, Powell said he would serve as chair pro tem, continuing to lead the institution until Warsh is confirmed.
That leaves the White House's Fed transition with little historical precedent to draw on. Warsh has been stalled in the Senate since the investigation began. Sen. Thom Tillis of North Carolina, a critical Republican vote on the Banking Committee, has pledged to block the confirmation until the Powell matter is resolved.
If Warsh is eventually confirmed but Powell remains on the board, he could be a voting member of the Federal Open Market Committee, the body that sets interest rates, through the midterm elections and potentially into the final stretch of Trump's second term. How a former and sitting chair would coexist, how markets would interpret any disagreement between them, and how Warsh would assert authority in that environment are all open questions.
Trump's remarks landed during an already busy week for the Fed. Powell's news conference Wednesday -- where he said the central bank wasn't prepared to look past the oil price surge triggered by the war with Iran -- helped send the Dow Jones Industrial Average down more than 750 points to a new 2026 low at market close. The Fed held rates steady at 3.5% to 3.75% for the second straight meeting. Officials projected one additional rate cut this year, though Powell noted "meaningful movement" among colleagues toward no cuts at all.
He currently sits at the helm of a central bank navigating stubborn inflation, a fragile labor market, and a new energy shock, all while its leadership structure is still unresolved.
Pirro, asked last week whether the appeal would further delay Warsh's confirmation, was direct: "I don't care. I'm in a legal lane. The rest is just white noise."
Trump, on Thursday, made clear he agrees.