Trump ramps up pressure on Fed, warns Powell to step aside or risk removal

United States President Donald Trump has escalated his standoff with the Federal Reserve, warning that Chair Jerome Powell could be removed from office if he fails to step down at the end of his tenure.

Trump, speaking in an interview on Fox Business on Wednesday, said he had resisted earlier calls to dismiss Powell but might reconsider if the central bank chief remains in office beyond his term as chairman.

“I’ve held back firing him… but if he’s not leaving on time, I’ll have to act,” the president said, signalling a possible shake-up at the apex bank.

Powell’s tenure as Fed chair is due to expire on May 15, although he still has about two years left on his term as a member of the Federal Reserve Board of Governors. Traditionally, outgoing chairs step down completely after leaving the top role, but Powell has yet to clarify his intentions.

The dispute has been further inflamed by an ongoing investigation into the renovation of the Federal Reserve’s headquarters, an issue Trump has repeatedly cited in his criticism of the central bank leadership.

He insisted that the probe must continue, describing the project as an example of mismanagement that needs to be exposed.

Trump has nominated former Federal Reserve governor Kevin Warsh to succeed Powell, expressing optimism that the nominee would pursue policies aligned with his administration’s push for lower interest rates.

However, the confirmation process faces fresh hurdles. Senator Thom Tillis has vowed to block Warsh’s nomination at the Senate Banking Committee pending the outcome of the investigation into the renovation project.

The legal tussle surrounding the probe has also intensified. Jeanine Pirro, the U.S. attorney for the District of Columbia, sought to subpoena Powell for documents related to the project but was prevented by a court ruling, which she has indicated she will challenge.

Despite the mounting pressure, Powell has maintained that he will remain in office as chairman until a successor is confirmed, in line with established Federal Reserve procedures.