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yesterday

Trump Intensifies Moves to Oust Fed Chair Powell Following Fed HQ Renovation Probe

Legal advisers are examining renovation cost findings at the Fed’s headquarters for grounds to challenge Powell’s protected tenure.

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Chair of the Federal Reserve of the United States Jerome Powell speaking during a Senate Banking, Housing, and Urban Affairs Committee hearing on the Semiannual Monetary Policy Report to Congress at the U.S. Capitol on July 9, 2024 in Washington, DC.
Fed Chair Jerome Powell testifies before the Senate Committee on Banking, Housing, and Urban Affairs on June 25.

Overview

  • President Trump is weighing legal avenues to remove Jerome Powell by citing an OMB investigation into $2.5 billion in cost overruns on the Federal Reserve’s Washington headquarters.
  • Treasury Secretary Scott Bessent has launched a formal process to identify and vet potential successors to Powell ahead of his term ending in May 2026.
  • Jerome Powell has reaffirmed his intention to serve his full four-year term and stressed that federal law shields Fed chairs from dismissal except for cause.
  • Bank of America CEO Brian Moynihan and other Wall Street leaders warn that firing Powell would unsettle markets and could drive Treasury yields sharply higher, potentially adding about $58 billion to annual interest costs.
  • Futures markets now assign almost no probability of an interest-rate cut at the Fed’s July meeting, underscoring the central bank’s resistance to political pressure.