Trump, allies push to remove Fed Chair Powell amid cost overruns, rate cut calls

Investing.com-- U.S. President Donald Trump and his administration were seen increasing their calls for Federal Reserve Chair Jerome Powell’s removal, especially as the president continued to demand for lower interest rates. 

Trump on Tuesday suggested that a major cost overrun for the Fed’s renovation project, which cost $2.5 billion, was potential grounds for firing Powell. Trump said “I think it sort of is” when asked whether the overrun was a fireable offense. 

Separately, Republican House of Representatives member Anna Paulina claimed that Powell’s firing was imminent, citing no sources. 

U.S. Director of Federal Housing William Pulte said that Powell is considering resigning, citing a “very credible, bipartisan source.” Republican Senator Cynthia Lummis also said Powell should resign. 

Republican attacks on Powell and calls for his resignation appear to revolve largely around Trump’s demands that the Fed cut interest rates immediately. Trump has also publicly insulted Powell over the matter, with reports showing that the president is actively seeking avenues to replace the Fed Chair.

White House economic advisor Kevin Hassett said earlier this week that the findings of a probe into the Fed renovation cost overrun could potentially give Trump authority to fire Powell.

A Bloomberg report said on Tuesday that Hassett is among the frontrunners to replace Powell. Trump said that Treasury Secretary Scott Bessent was also a top candidate to replace Powell, but that he liked Bessent’s work in his current role.

Other runners for the role include former Fed governor Kevin Warsh. 

Powell and a host of other Fed members have signaled that interest rates will remain steady until the inflationary impact of Trump’s trade tariffs becomes clear. Powell also intends to serve the remainder of his term, which ends in May 2026. 

Trump’s attempts to coerce or potentially fire the Fed Chair have raised concerns over the independence of the central bank, which has traditionally operated outside influence from U.S. politics. 

Analysts have warned that Powell’s premature exit could severely dent faith in the U.S. economy.