Trump Threatens to Dismiss Fed Chair Powell Amid Ongoing Investigation

Trump's Warning to Jerome Powell

President of the United States, Donald Trump, has issued a warning to Federal Reserve Chair Jerome Powell, indicating he may terminate him if Powell remains on the board after his term concludes next month. In a recent interview with Fox News, Trump responded to Powell's statement about not resigning during an ongoing Justice Department investigation into a $2.5 billion renovation project at the Fed, saying, "Well then I’ll have to fire him, OK?" Trump has expressed dissatisfaction with Powell for being slow to implement interest rate cuts, which he believes are necessary for a swift economic recovery. Powell, on the other hand, has suggested that the investigation is an attempt to compromise the Fed's autonomy in setting interest rates. Notably, a federal prosecutor acknowledged last month that the investigation has not uncovered any criminal activity.

Kevin Warsh Nominated as Powell's Successor

Trump has put forward Kevin Warsh, a former Fed official, as his choice to replace Powell. However, Warsh's confirmation process has encountered delays, particularly due to Senator Thom Tillis, a Republican from North Carolina, who has stated he will not support any Fed nominees until the investigation is resolved. This latest conflict between the President and the Fed Chair intensifies the ongoing debate over interest rates, especially in light of fluctuations in oil and commodity prices and the costly renovation of the Fed's headquarters.

Additionally, federal prosecutors made an unexpected visit to the construction site of the Federal Reserve headquarters this week, which is under scrutiny for the renovation project. According to sources familiar with the situation, two prosecutors and an investigator from the office of U.S. Attorney Jeanine Pirro were denied access by a contractor and directed to consult with Fed attorneys. These sources requested anonymity as they were not authorized to discuss the investigation publicly. During a recent closed-door session with a federal judge, a senior deputy from Pirro's office admitted that no evidence of wrongdoing had been found regarding the headquarters project. The investigation has faced bipartisan criticism in Congress and has also stalled the Senate's review of Kevin Warsh, Trump's nominee to succeed Powell when his term ends on May 15.

With inputs from AP