President Donald Trump threatened to fire Federal Reserve Chair Jerome Powell if he remains in his position beyond the expiration of his term on May 15, escalating a confrontation that has paralyzed the central bank's leadership transition.
Then I'll have to fire him
Donald Trump — Fox Business
The threat comes as Powell plans to stay on temporarily until his nominated successor, Kevin Warsh, receives Senate confirmation. Powell's decision to remain stems from an ongoing Justice Department investigation into Federal Reserve headquarters renovations that has complicated the confirmation process.
Federal prosecutors made an unannounced visit Tuesday to the Fed's construction site, seeking access to inspect the $2.5 billion renovation project. Two prosecutors and an investigator from U.S. Attorney Jeanine Pirro's office were turned away by contractors and referred to Fed attorneys, according to sources familiar with the incident.
The investigation centers on cost overruns and Powell's brief testimony about the project before the Senate Banking Committee last June. Trump has accused Powell of mishandling the renovation, claiming it could have been completed for tens of millions rather than billions of dollars.
The BBC frames this as a constitutional crisis over central bank independence, emphasizing the unprecedented nature of threatening to fire a Fed chair. Their coverage highlights the broader implications for institutional norms and market stability, reflecting Britain's own experience with central bank autonomy.
El País portrays Trump's actions as authoritarian pressure on independent institutions, emphasizing his relentless campaign against Powell. The Spanish outlet frames this through a European lens of democratic institutions under threat, drawing parallels to concerns about executive overreach in democratic systems.
Don't you think we have to find out what happened there? I have to find out
Donald Trump — Fox Business
Republican Senator Thom Tillis of North Carolina has emerged as the key obstacle to Warsh's confirmation. Tillis, a member of the Banking Committee, has vowed to block the nomination until prosecutors drop their investigation of Powell. With the committee closely divided along partisan lines, Tillis's opposition effectively prevents Warsh from advancing.
The standoff has created an unprecedented situation where Trump's own criminal investigation is preventing his preferred candidate from taking office. During a closed-door hearing last month, prosecutors acknowledged they have found no evidence of criminal wrongdoing in their investigation of the headquarters project.
There really is no path
Thom Tillis, referring to Warsh's confirmation prospects
Treasury Secretary Scott Bessent expressed optimism that Warsh would be confirmed before May 15, stating he believes Tillis wants to do what's best for the Federal Reserve. The Banking Committee has scheduled a hearing on Warsh's nomination for April 21.
Trump's pressure campaign against Powell reflects his longstanding frustration with the Fed's monetary policy. The president has repeatedly called for interest rate cuts to boost economic growth, while Powell has maintained the central bank's independence in setting rates based on economic conditions rather than political pressure.
If Trump follows through on his threat, it would mark the first time a president has fired a Federal Reserve chair, breaking with decades of precedent designed to insulate the central bank from political interference. Powell was originally appointed by Trump in 2017 and reappointed by President Biden in 2021.
The confrontation has already affected financial markets, with stocks and the dollar declining when reports first emerged of Trump's consideration of firing Powell. The uncertainty surrounding Fed leadership comes at a critical time as the central bank navigates inflation concerns and economic policy decisions.