U.S. President Donald Trump’s top economic adviser, Kevin Hassett, said on Sunday that it was time for Jerome Powell to leave the Federal Reserve’s Board of Governors.
His comments followed an internal report that criticized management of the Federal Reserve’s headquarters renovation project but found no evidence of criminal wrongdoing.
Hassett Says Powell Should “Move On”
Hassett, who heads the White House National Economic Council, made the comments during an appearance on Fox News’ Sunday Morning Futures.
When asked whether former Fed Chair Jerome Powell should resign from the board, Hassett said he believed Powell should step aside.
He also argued that doing so would help preserve confidence in the independence of the Federal Reserve.
Fed Watchdog Finds No Criminal Wrongdoing
The Federal Reserve’s internal watchdog published a report on September 30 examining the central bank’s $2.4 billion headquarters renovation project in Washington.
The report found no evidence of criminal activity and did not identify any administrative misconduct.
However, investigators pointed to management weaknesses that contributed to the project’s cost rising to nearly double its original estimate.
Trump Calls for Powell’s Resignation
President Trump responded to the report by increasing pressure on Powell.
In a social media post, Trump said Powell should be forced to resign from the Federal Reserve board.
Trump has repeatedly criticized Powell over monetary policy and previously pushed the central bank to lower interest rates while Powell served as Fed chair.
The latest dispute adds another layer of tension between the White House and the Federal Reserve.
Justice Department Will Not Reopen Investigation
U.S. Attorney General Todd Blanche said the Justice Department does not currently plan to reopen a criminal investigation into Powell based on the findings of the internal report.
Trump had asked Blanche to review the watchdog’s conclusions.
However, Blanche said the Justice Department could take action if new evidence emerges.
The Federal Reserve has already announced plans to appoint an independent auditor to examine the renovation costs in greater detail.
Blanche said that if the audit uncovers evidence of criminal misconduct, the Justice Department would investigate.
Powell Remains on Federal Reserve Board
Powell has remained a member of the Federal Reserve’s Board of Governors since stepping down as chair in May.
That decision broke with the traditional practice of Fed chairs leaving the central bank after their leadership terms end.
Powell has said that threats of criminal investigations involving him and the Federal Reserve left him with little choice but to remain on the board.
Trump and other administration officials have strongly criticized that position.
Trump Continues to Pressure Fed Over Interest Rates
Trump has long pushed the Federal Reserve to reduce borrowing costs.
However, the central bank has recently moved in the opposite direction.
Last month, policymakers led by Fed Chairman Kevin Warsh voted unanimously to raise interest rates by 25 basis points as inflation remained stubbornly high.
Hassett said he disagreed with that decision but acknowledged that Warsh was acting based on his own assessment of economic conditions.
Warsh Faces Pressure Over Fed Policy
Trump appointed Warsh to succeed Powell as Federal Reserve chair.
Despite frequently criticizing the central bank’s policy decisions, Trump has publicly said Warsh should make his own judgments.
Trump also said he personally would likely have voted against the board’s latest rate increase.
The comments highlight the ongoing tension between the administration’s preference for lower interest rates and the Federal Reserve’s focus on controlling inflation.
Fed Independence Remains in Focus
The dispute involving Powell, the renovation report and the White House has renewed debate over Federal Reserve independence.
For markets, the issue goes beyond the renovation itself.
Investors are closely watching whether political pressure could influence future monetary policy decisions, especially as inflation remains elevated and interest rates stay high.
