Trump: May fire Powell due to "renovation issues"

Wallstreetcn
2025.07.16 03:40
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When asked whether the renovation issue constitutes grounds for dismissing the Federal Reserve Chairman, Trump responded, "I think to some extent it does." Powell must respond to the inquiry letter from the White House Office of Management and Budget by this weekend. This response will be a key indicator in determining whether the Trump administration will take actual action

U.S. President Donald Trump stated on Tuesday (July 15) that the cost overruns of the Federal Reserve headquarters renovation project could constitute grounds for firing Federal Reserve Chairman Jerome Powell. This statement further highlights the Trump administration's intention to replace the leadership of the Federal Reserve.

According to media reports, when asked whether the renovation issues could justify firing the Federal Reserve chairman, Trump responded, "I think to some extent, yes."

Trump also questioned whether there were issues with Powell's testimony before Congress regarding the construction matters. The White House Office of Management and Budget (OMB) sent a letter to Powell last week, requesting answers regarding the cost overruns and changes related to the $2.5 billion project, while the Federal Reserve has asked its inspector general to investigate the relevant details.

Reports also indicated that the Trump administration hopes to appoint a new Federal Reserve chairman who is willing to follow the president's interest rate cut directives. Although the Federal Reserve chairman does not have absolute power in interest rate decisions, Trump still views Powell as the main obstacle to significant rate cuts.

Renovation Cost Overruns Become a Political Weapon

According to a previous article by Jianwen, the White House Office of Management and Budget sent a formal letter to Powell last week, requesting a detailed explanation regarding the cost overruns and project changes of the Federal Reserve's $2.5 billion renovation project. This action is seen as the latest means by the Trump administration to pressure the Federal Reserve.

The Federal Reserve has submitted the matter to its inspector general for investigation. Additionally, Trump's senior advisor Kevin Hassett hinted over the weekend that Trump might use this issue as a reason to fire Powell.

Powell must respond to the inquiry letter from the White House Office of Management and Budget by this weekend. This response will be a key indicator in determining whether the Trump administration will take actual action.

Market attention is focused on whether the Trump administration will truly take action or merely use the renovation issue as a tool to pressure the Federal Reserve

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