Donald Trump said on Wednesday that he does not intend to fire Jerome Powell, even as the Justice Department conducts a criminal investigation involving the head of the Federal Reserve. However, the president cautioned that it was still too early to predict what his final decision might be.
“I don’t have any plan to do that,” Trump told Reuters when asked directly whether he would seek to remove Powell from office.
Pressed on whether the investigation could eventually justify such a move, Trump said the administration was taking a wait-and-see approach. “Right now, we’re in a little bit of a holding pattern,” he said, adding that no conclusions had been reached. “It’s too soon. Too early.”
Powell’s Term and Possible Successors
Powell’s current term as Fed chair is set to expire in May, though he is not required to leave the Board of Governors until 2028. Trump indicated he is already considering potential successors, naming former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett as leading options.
“The two Kevins are very good,” Trump said, noting that other candidates are also under consideration. He ruled out Treasury Secretary Scott Bessent, saying Bessent prefers to remain in his current role. Trump said an announcement could come within weeks.
Dispute Over Fed Independence
The Justice Department investigation centers on cost overruns tied to a $2.5bn renovation project at the Fed’s historic headquarters. Powell has denied any wrongdoing and has suggested the probe is being used to pressure him after he resisted Trump’s calls for aggressive interest rate cuts.
Several Republican senators, whose support Trump would need to confirm a new Fed chair, have joined foreign officials, investors and former US policymakers in warning that the investigation risks politicising the central bank. The administration has defended the inquiry, saying it has an obligation to examine potential misconduct.
Trump has repeatedly criticised Powell for not lowering interest rates as quickly or as sharply as he would like, particularly as voters continue to express concern over living costs ahead of November’s midterm elections.
“I don’t care,” Trump said when asked about criticism from lawmakers. “They should be loyal.”
Testing Presidential Authority
Trump also brushed aside warnings from economists and market analysts that undermining central bank independence could weaken the US dollar or fuel inflation. “I don’t care,” he said again.
During his first year back in office, Trump has pushed the boundaries of presidential power, including an attempt to dismiss another Fed official, Governor Lisa Cook. Cook has challenged her removal in court, with the case expected to be argued before the US Supreme Court next week.
“A president should have something to say” about monetary policy, Trump told Reuters, arguing that his business background gives him greater insight than Powell, whom he has repeatedly criticised over interest rate decisions.
For now, Trump says Powell remains in his post, even as the investigation and political pressure surrounding the Federal Reserve continue to build.