White House officials are exploring whether President Donald Trump has the authority to remove Federal Reserve Chair Jerome Powell, amid mounting tensions over monetary policy and an expensive renovation at the Fed’s headquarters.
Kevin Hassett, Director of the National Economic Council, confirmed on ABC’s This Week that the administration is actively “looking into” the legal grounds for ousting Powell.
“That’s a thing that’s being looked into,” Hassett told host Jonathan Karl. “But certainly, if there’s cause, he does.”
The comments come as Trump continues to pressure the Fed to slash interest rates—criticism he has made repeatedly against Powell for resisting aggressive rate cuts. The central bank has maintained its position, citing concerns over inflation and market stability.
Costly Renovation Fuels Scrutiny
While the president’s frustrations with monetary policy are well known, the administration may also be preparing to use a $700 million cost overrun in the renovation of the Fed’s Washington, D.C., headquarters as justification for Powell’s dismissal.
Office of Management and Budget Director Russ Vought recently sent a letter to Powell, questioning the scale and management of the project.
“The President is extremely troubled by your management of the Federal Reserve System,” Vought wrote. “Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington D.C. headquarters.”
According to Hassett, Trump could view the renovation as a potential “predicate” for action:
“Whether the president decides to push down that road or not is going to depend a lot on the answers we get to the questions Russ Vought sent to the Fed,” Hassett said.
The Federal Reserve has responded by publishing a new FAQ section on its website, addressing criticisms of the project and denying allegations—such as rumors of a VIP dining facility being added to the building.
Legal Obstacles to Firing Powell
The Supreme Court has previously hinted that removing the Fed Chair may be legally problematic, noting the Federal Reserve’s “uniquely structured, quasi-private” status that offers insulation from direct presidential interference.
Still, Trump appears undeterred. Over the weekend, he reignited calls for Powell to step down:
“Well, I think if Jerome Powell stepped down, it would be a great thing,” Trump said Saturday. “Jerome Powell’s been very bad for our country. We should have the lowest interest rate on Earth, and we don’t.”
Trump argues that lower interest rates are necessary to stimulate economic growth, particularly in the face of inflation concerns linked to his administration’s tariffs and trade policies.
Potential Replacements
As speculation swirls, The Wall Street Journal reports that Trump is considering several candidates to replace Powell when his term ends in May 2026. Among them are Hassett himself and former Fed governor Kevin Warsh.
With the president’s repeated jabs at Powell and growing dissatisfaction from within his base over inflation and rate policy, the battle over the Fed chair’s future appears to be just heating up.