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| Trump clashes with Fed Chair Jerome Powell |
Summary Bullet Points
- Trump questions Jerome Powell after the Fed’s $700M cost overrun on its HQ project.
- Donald Trump criticises Powell for resisting rate cuts and alleged mismanagement.
- Trump administration probes firing of Fed Chair amid legal and market concerns.
- Conflict between Trump and the Fed intensifies over renovation and policy disputes.
- Firing Jerome Powell could risk financial chaos and test central bank independence.
Trump clashes with Fed Chair Jerome Powell over costly Fed headquarters
President Donald Trump is again in conflict with Federal Reserve Chair Jerome Powell, this time over a $2.5 billion renovation of the Fed’s Washington headquarters that has ballooned with a $700 million cost overrun.
Trump has called the project “out of control” and accused Powell of overseeing unauthorised luxury upgrades without federal oversight.
This growing friction has reignited Trump's desire to see Powell removed, a move he’s previously floated over policy disagreements. The White House is now pointing to the renovation fiasco as possible legal grounds to act.
President Donald Trump administration explores legal grounds to remove Jerome Powell
According to White House economic adviser Kevin Hassett, the administration is seriously reviewing whether President Trump can lawfully fire Jerome Powell. The review stems from alleged violations related to the Fed’s renovation project and Powell’s broader performance.
A formal letter from OMB Director Russell Vought accused Powell of bypassing the National Capital Planning Commission when altering building plans, an act the White House considers a breach of federal procedures.
In response, the administration has strategically appointed allies to the Commission, suggesting an effort to tighten control over the Fed and increase pressure on Powell.
Trump criticises Powell’s interest rate decisions as “bad for the country”
Beyond the building controversy, Trump has repeatedly attacked Powell’s handling of monetary policy, especially the Fed’s refusal to cut interest rates further. Trump’s economic advisers argue that lower rates are essential to fuel growth and lower debt burdens.
In public statements, Trump has labelled Powell “very bad for the country” and openly demanded his resignation. Powell, however, has remained defiant and committed to protecting the Federal Reserve’s independence.
Firing the Federal Reserve Chair would shake markets and raise inflation risks
Analysts warn that removing Jerome Powell would have explosive consequences. According to Deutsche Bank strategists, Powell’s ouster is an “underpriced risk” that could trigger massive volatility in U.S. bond and currency markets.
Such an action could send investor confidence plummeting, raise long-term borrowing costs, and even spark inflation, ironically undermining Trump’s economic goals. Legal scholars note that no Fed chair has ever been fired before, and the move would likely face a constitutional challenge.
Trump’s path to removing Powell faces legal and political barriers
Despite Trump’s frustration, Powell’s four-year term runs through May 2026, and any attempt to terminate him would likely end up in court. Insiders say the White House is aware of the legal hurdles and the potential market backlash, which has so far delayed a direct dismissal.
That said, the administration continues to test the limits of executive power, using the renovation scandal as a pressure point. Whether this ends in a resignation, legal showdown, or strategic stalemate remains to be seen.
Final thoughts: Powell's independence vs. Trump’s authority
The power struggle between President Donald Trump and Federal Reserve Chair Jerome Powell is more than just personal; it's a fundamental test of central bank independence in a hyper-political era.
As 2026 approaches, and economic pressures rise, this drama could redefine how presidents interact with the Fed and reshape investor trust in the U.S. financial system.
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