Trump: Although Powell is being investigated, there are no plans to remove him directly.
On Wednesday, Trump stated that although the Justice Department is investigating the Federal Reserve’s renovation project, he currently has no plans to directly remove Fed Chairman Powell. This statement somewhat clarified recent speculation regarding changes in the Federal Reserve’s leadership, but Trump still insists that the president should have a say in central bank policy and continues to push ahead with the selection of a successor.
According to Reuters, in an exclusive interview at the White House, when asked whether he would replace Powell, Trump responded: “I have no such plans.” However, he also noted that he is “in a bit of a wait-and-see mode” with Powell and that it is “too early” to decide whether to use the investigation’s results as grounds for removal. Trump reiterated that, because he has made significant profits in business, he understands the economy better than the “too late Powell.”
This statement comes at a time of increasingly tense relations between the Trump administration and the Federal Reserve. Powell recently revealed that the Fed has received a grand jury subpoena related to a renovation project and the investigation of related testimonies. In response, Trump insisted that although some Republican senators have expressed concerns that the Justice Department’s investigation could interfere with interest rate decisions, he does not care, and emphasized that Republicans “should be loyal.”
Meanwhile, Trump is accelerating the search for Powell’s successor, with Powell’s term expiring in May, and praised White House economic adviser Kevin Hassett and former Fed governor Kevin Warsh by name. He said he would announce a relevant decision “in the coming weeks.”
Pressure and the Independence Debate
According to federal law, Federal Reserve governors can only be removed “for cause,” not due to policy disagreements. The investigation into the Fed’s renovation project has triggered a new round of concerns about central bank independence. In a statement on Sunday, Powell called the investigation an excuse for pressure on interest rate policy, stressing that the core issue is whether the Fed can continue to set interest rates based on evidence and economic conditions, rather than being subject to “political pressure or intimidation.”
Although retiring Republican Senator Thom Tillis of the Senate Banking Committee has threatened to block Fed nominations until the investigation is resolved, Trump said he will continue to move forward with the nomination plan. Facing internal Republican doubts about the motives behind the investigation, Trump said frankly in the interview:
“I don’t care. Nothing to say.”
On the matter of a successor, Trump was unapologetic about his preference for specific candidates. In the interview, he said: “Both Kevins are outstanding.” referring to Kevin Hassett and Kevin Warsh. Trump added that there are other excellent candidates as well, but he will formally announce his decision soon.
Talking about the upcoming midterm elections, Trump expressed optimism about the Republican party’s prospects, but also acknowledged that historical patterns do not favor the ruling party. He noted that in the past 65 years, only a few presidents have managed to win in the midterms. He described this historical rule as a “lock” that is hard to break, and even successful presidents rarely escape it.
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