President Trump has the authority to dismiss Federal Reserve Chairman Jerome Powell for cause, provided there’s sufficient evidence, according to White House economic adviser Kevin Hassett.
Hassett, who directs the National Economic Council, mentioned during an ABC “This Week” interview that whether Powell will be let go over a claimed $700 million cost overrun would largely depend on Powell’s forthcoming responses to questions posed by the administration.
Last week, White House budget director Russell Vought criticized Powell for his answers regarding an ambitious renovation of the Fed’s building, which is projected to cost $2.5 billion. In a post on X, Vought likened the renovation to France’s lavish Palace of Versailles, highlighting features like rooftop gardens and elaborate water elements.
Hassett’s remarks indicate that the Trump administration is exploring Powell’s testimony concerning the project as a potential reason to initiate his dismissal before the committee chair’s term concludes next May.
Trump has consistently called for Powell to resign, arguing that he hasn’t lowered interest rates since taking office.
On Sunday, Vice President JD Vance faced further backlash following a post on X.
The Federal Reserve made a statement on Friday that countered some of Vought’s claims about the renovation project. They characterized it as the first comprehensive update to the building since it was built in the 1930s.
Images showing leaking pipes and roofs indicate rising costs due to inflation in materials, labor, and equipment. The Fed refuted assertions of extravagant features like VIP dining areas or new elevators, noting that the project will involve a “green roof” aimed at managing water runoff and enhancing energy efficiency.
“There are no new water features, no beehives, no rooftop gardens,” Powell told a senator during June testimony, rejecting allegations of overspending on the project.
He explained that the headquarters was nearly 90 years old and, as a result, “really not safe and not waterproof,” which has contributed to the rising costs.
The Fed has stated that the renovation will consolidate operations onto a single campus, thereby reducing leasing expenses for off-site locations. As of February, a report from the Fed’s inspector general estimated project costs had grown from $1.9 billion to $2.4 billion over two years, reflecting a $500 million increase.
Regarding whether Trump could remove Powell, Hassett mentioned that he could be a contender to head the Fed.
Rep. French Hill (R-Ark.), who chairs the House Financial Services Committee, asserted that Trump does not have the authority to fire the Fed chairman, while noting that Congress will maintain rigorous oversight of the Central Bank.
“Even if Congress believes it should have an independent Federal Reserve, it doesn’t mean they’re shielded from criticism,” Hill stated on CBS. “Every president since World War II has had the opportunity to choose a chairman if they felt there was a disconnect.”
In a separate interview on Sunday, Kevin Warsh, a former Fed committee member viewed as a possible replacement for Powell, claimed that the Central Bank requires an overhaul that extends beyond just the chairman’s role.
“The Fed has lost its direction in both oversight and monetary policy,” Warsh remarked during an interview on Fox’s “Sunday Morning Futures.” He added, “We need a real change at the Fed. It involves a shift in mindset across the board, and frankly, it’s about making some tough decisions because the current approach isn’t working.”
