President Donald Trump threatened to fire Federal Reserve Bank Chair Jerome Powell if he stays on the board after his leadership term expires next month — but also championed the federal investigation that could sideline his own pick for the job.
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In an interview with Fox Business that aired Wednesday, Trump said that if Powell stays on the board of the Fed past May 15, “then 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.”
The May date is when Powell’s chairmanship is set to expire, but it’s unclear at this point if he will do so.
Trump’s nominee for the post, Kevin Warsh, has a confirmation hearing scheduled for next week, but Sen. Thom Tillis, R-N.C., told NBC News on Tuesday night that he will not vote to advance his nomination until the Justice Department drops its ongoing criminal investigation into Powell.
Tillis, a member of the Senate Banking Committee, said the investigation into Powell over expensive renovations at Fed properties appears to have been launched solely to try to curry favor with the White House, and “I don’t want to reward bad behavior.”
“Kevin’s a perfect candidate, and that’s why it’s so frustrating that somebody in DOJ in February, decided that they were going to maybe garner favor from somebody in the White House by trying to invoke a criminal investigation against Jerome Powell,” Tillis said, adding that the moment DOJ announces there’s not sufficient evidence to continue an investigation, “I will vote for Kevin Warsh.”
If the probe continues, Tillis said, “I’m not going to support movement out of the committee. I don’t think that there’s any path outside of my vote.”
Senate Majority Leader John Thune, R-S.D., citing Tillis’ stance, said, “I think it’s in everybody’s best interest to wrap up the investigation.”
“It’d be better if it winds down. A new man is nominated, very qualified. We’re excited, obviously, to get the opportunity to confirm him, but, you know, it would be great if we could wind up prior business before that happens,” Thune said.
Powell, whose term as a board governor does not expire until 2028, told reporters at a news conference last month that he has “no intention of leaving the board until the investigation is well and truly over with transparency and finality.”
And if Warsh is not confirmed by May 15, Powell said he could stay on as acting Fed chair.
Trump has repeatedly blasted Powell for refusing to lower interest rates as much as he’d like, and had previously floated the idea of firing him.
Fox Business host Maria Bartiromo asked if the easiest way to get rid of Powell would be to end the probe being led by U.S. Attorney for the District of Columbia, Jeanine Pirro.
Trump acknowledged it would, but said, “does that mean, does that mean we stop a probe of a building that I would have done for $25 million that’s going to cost maybe $4 billion — don’t you think we have to find out what happened there?”
“It’s more than a criminal probe,” Trump said. “It’s a criminal probe, I guess, but it’s also probe on incompetence.”
“And so whether it’s incompetence, corruption or both, I think you have to find out. I really do. I think you have to find out,” the president said, before adding that he would fire Powell if he didn’t leave.
Trump also expressed optimism that Tillis would change his mind.
“He doesn’t want the legacy of having an incompetent guy stay there for longer than is necessary. I know Thom Tillis. He’s a good man. I don’t think he’s going to hurt — I know he said what he said, and maybe it’s true, in which case, I’ll have to live with it,” Trump said.
Speaking on the Senate floor, Senate Minority Leader Chuck Schumer, D-N.Y., said “There are no legitimate grounds for the president to remove the chair of the Federal Reserve for simply doing his job.”
“The more you screw around with the Fed, the higher rates will be and you want lower rates,” he added.
In January, the DOJ subpoenaed the Federal Reserve related to Powell’s testimony before the Senate last year regarding renovations to Fed office buildings, which have gone way over budget.
The original estimate for the renovations back in 2019 was $1.4 billion, Fed documents show. They’re now estimated to cost over $2.4 billion.
Powell blasted news of the probe at the time, saying the project had already been audited.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said.
Last month, Judge James Boasberg, the chief judge of the U.S. District Court for Washington, D.C., blocked the subpoenas, saying that “the Government has produced essentially zero evidence to suspect Chair Powell of a crime.”
Pirro, however, has apparently not dropped the probe.
Three officials from her office showed up at the Fed’s headquarters construction site in downtown Washington on Tuesday and said they wanted a “tour,” Robert Hur, the central bank’s outside counsel, told Pirro’s office in an email, which was seen by NBC News.
Pirro suggested in a statement Tuesday night that the investigators were justified in trying to inspect the renovation project.
“Any construction project that has cost overruns of almost 80% over the original construction budget deserves some serious review,” she said. “And these people are in charge of monetary policy in the United States?”
It’s unclear if Trump would be able to fire Powell – something a president cannot do except “for cause,” meaning for some form of wrongdoing.
Earlier this year, the U.S. Supreme Court appeared skeptical of Trump’s efforts to fire another Federal Reserve board member, Lisa Cook. A decision in that case is pending.
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