Trump Administration Considers Firing Fed Chair Powell Amid Criticism

July 24, 2025
Trump Administration Considers Firing Fed Chair Powell Amid Criticism

In a significant escalation of tensions between the Trump administration and the Federal Reserve, National Economic Council Director Kevin Hassett stated that the White House is exploring whether it can legally terminate Federal Reserve Chair Jerome Powell. This revelation comes amidst growing criticisms of Powell, particularly regarding the Federal Reserve's $2.5 billion renovation project, which has reportedly exceeded its budget by $700 million.

Hassett's comments were made during an interview on ABC News' 'This Week' on July 13, 2025, where he indicated that President Donald Trump does indeed possess the authority to dismiss Powell 'if there’s cause'. While Trump has previously expressed reluctance to remove Powell, the administration's intensified scrutiny of the Fed's renovation efforts suggests a shift in strategy.

The Federal Reserve, which is primarily funded through interest income from its securities and fees charged to banks, has faced mounting pressure from administration officials. Office of Management and Budget Director Russell Vought accused Powell of 'grossly mismanaging the Fed' and has initiated an inquiry into the renovation project. Vought's public questioning of the project, including a list of inquiries sent to Powell, hints at a potential groundwork being laid for removal.

According to Dr. Sarah Johnson, Professor of Economics at Harvard University, the administration's scrutiny of the renovation project reflects broader concerns about fiscal responsibility within government institutions. Johnson stated, 'The level of overspending is alarming, especially for an institution tasked with ensuring economic stability.'

The Federal Reserve has responded to these criticisms by updating its website to clarify aspects of the renovation, denying claims about the construction of new VIP dining rooms. In a statement, the Fed reaffirmed its commitment to transparency and fiscal prudence in its operations.

Hassett's remarks have led to speculation regarding potential replacements for Powell, should the administration decide to pursue dismissal. Among the names mentioned are Hassett himself and former Fed Governor Kevin Warsh, who has expressed discontent with the current direction of the Fed. Warsh, appearing on Fox News, described the renovation project as 'outrageous' and criticized the Fed for having 'lost its way' in monetary policy and supervision.

The implications of this ongoing conflict between the Trump administration and the Federal Reserve could be profound, affecting not only the leadership of the Fed but also the broader economic landscape. As tensions persist, the stability and independence of the Federal Reserve may come under increasing scrutiny, raising questions about the future of U.S. monetary policy.

In conclusion, the potential for Powell's removal highlights a critical intersection of politics and economic governance, with far-reaching consequences for market confidence and policy direction in the United States. As the situation develops, close attention will be paid to both the administration's decisions and the Federal Reserve's responses to these unprecedented challenges.

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Federal ReserveJerome PowellDonald TrumpKevin HassettRussell Voughteconomic policymonetary policyU.S. Treasurygovernment spendingbudget managementrenovation projectpolitical accountabilitypublic spendingfinancial oversighteconomic stabilitygovernment transparencyfiscal responsibilitycentral bankU.S. economyfinancial marketsTrump administrationeconomic governanceFed leadershipKevin WarshFederal Reserve Boardpublic inquirymedia coveragepolitical tensionsWhite HouseU.S. Congress

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