President Trump said Wednesday that he will fire Federal Reserve Chair Jerome Powell if he fails to step down when his term expires on May 15. At the same time, Trump indicated that a federal investigation into Powell’s management of a construction project at Fed headquarters — an investigation that threatens to derail the Senate’s confirmation of Powell’s replacement, Kevin Warsh — would continue.
Although Trump named Warsh as Powell’s replacement in January, he has continued to pressure Powell to lower the Fed’s benchmark interest rate in hopes of stimulating the economy, while freely expressing his irritation that Powell has failed to do so using an array of insults, including “numbskull” and “major loser.”
The investigation: In what many have seen as a ploy to pressure the Fed chief, the Department of Justice in January launched a probe into Powell’s handling of the renovation of the central bank’s headquarters complex in Washington, a $2.5 billion project that has gone over budget. That investigation has rankled some lawmakers, including Republican Sen. Thom Tillis, who sits on the Banking Committee that will vet Warsh as Powell’s replacement. Tillis has said that he opposes confirming anyone for the Fed “until this legal matter is fully resolved.”
A few weeks ago, Powell said that he would continue to serve as Fed chair if his replacement is not seated by May 15, to maintain continuity and control at the central bank. Trump made it clear Wednesday that he will intervene if that happens, though it’s not clear he has the legal authority to do so.
“I’ll have to fire him, OK? If he’s not leaving on time,” Trump told Fox Business in an interview. “I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial.”
Justice presses ahead: In another sign that the Trump administration remains intent on the Powell probe, a team of federal prosecutors visited the Fed’s headquarters on Tuesday, though they were turned away after being told they need to formally request permission to tour the building site.
Jeanine Pirro, the former Fox News host who serves as the U.S. attorney for the District of Columbia, defended the visit by members of her team. “Any construction project that has cost overruns of almost 80 percent over the original construction budget deserves some serious review,” she said in a statement Tuesday. “And these people are in charge of monetary policy in the United States?”
Hoping to move on: The Senate Banking Committee said yesterday that it will hold a hearing on Warsh’s nomination next week, despite Tillis’s pledge to delay any confirmation until the Powell investigation concludes.
Although it continues, that investigation has recently faced setbacks, with a federal judge rejecting Pirro’s request for subpoenas last month. “There is abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the president or to resign and make way for a Fed chair who will,” the judge wrote.
Republican leaders seem to prefer that Trump drop the matter. “It’s in everybody’s best interest to wrap up the investigation,” Senate Majority Leader John Thune said Wednesday. Tillis also chimed in, mockingly posting a picture of the Three Stooges on social media with the comment, “The U.S. Attorney’s Office for D.C. at the crime scene.”