US President Donald Trump on Wednesday warned that he may move to remove Federal Reserve Chair Jerome Powell from his position on the central bank’s Board of Governors if Powell does not step down after his term as Fed chief ends on May 15.
The remarks signal an escalation in an already tense standoff that has disrupted what is typically a smooth leadership transition at the Federal Reserve.
Speaking in an interview with Fox Business, Trump reiterated his dissatisfaction with Powell and suggested that further action could follow if the Fed chair remains in his broader role.
The president indicated he had previously refrained from taking such steps but may reconsider.
Trump doubles down on criticism and probe
During the interview, Trump openly signalled his willingness to act against Powell if he does not exit fully.
The president also reaffirmed support for an ongoing investigation linked to a Federal Reserve building project, describing it as a means to demonstrate what he called Powell’s “incompetence”.
The probe is being overseen by US Attorney Jeanine Pirro, though its current status remains uncertain.
Trump did not indicate any intention to halt the investigation, even as questions mount about its implications for broader policy and governance at the central bank.
The ongoing investigation has added complexity to the nomination of Kevin Warsh, Trump’s pick to succeed Powell as Fed chair.
The probe could delay Warsh’s Senate confirmation, particularly as political opposition intensifies.
Republican Senator Thom Tillis has criticised the investigation, calling it a “frivolous assault” on the Federal Reserve’s independence.
Tillis has said he would block Warsh’s confirmation unless the probe is dismissed.
Warsh is scheduled to appear before the Senate Banking Committee on April 21, where his nomination will face scrutiny amid the ongoing controversy.
The composition of the Federal Reserve’s seven-member Board of Governors further complicates the situation.
Trump has appointed only three current members, while three others were selected by former President Joe Biden.
Powell himself, though initially elevated by Trump, has maintained independence from political pressure.
Even officials appointed during Trump’s tenure, including Fed Governor Christopher Waller, are viewed as unlikely to support major policy shifts driven by political influence.
The administration’s efforts to reshape the board, including a pending legal case involving Fed Governor Lisa Cook, have added urgency to discussions about the central bank’s autonomy.
Powell signals intent to stay amid investigation
Powell has indicated he may not follow the traditional path of stepping down from the board after his term as chair ends.
At a press conference following the Federal Reserve’s March policy meeting, he stated his intention to remain in his role.
His remarks suggest a potential departure from precedent and highlight the growing institutional tensions surrounding the Federal Reserve’s leadership and independence.
The intensifying clash between Trump and Powell underscores broader concerns about the independence of the US central bank.
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