Trump Threatens to Fire Powell Over Fed Probe

President Donald Trump has threatened to fire Federal Reserve Chair Jerome Powell if he does not step down when his term as chair ends on May 15. According to multiple reports, Trump made this threat during an interview with Fox Business, stating that he might have to remove Powell from the position if he remains beyond his term.

The threat comes amid an ongoing investigation into a $2.5 billion renovation of Federal Reserve headquarters in Washington D.C., which Trump alleges is either corrupt or incompetent. U.S. Attorney Jeanine Pirro has been leading this investigation, and prosecutors from her office recently made an unannounced visit to the construction site.

Senator Thom Tillis (R-N.C.) has stated he will block the nomination of Kevin Warsh, Trump's chosen replacement for Powell, until the investigation is concluded. The Senate Banking Committee is scheduled to hold hearings on Warsh's nomination later this month. Meanwhile, Powell has indicated that he plans to stay on the Fed's board until the investigation is over.

The renovation project has faced significant cost overruns due to unforeseen conditions such as more asbestos than anticipated and toxic contamination in the soil. Trump has also tried to oust another Fed governor, Lisa Cook, but has been unsuccessful so far. The case is currently before the U.S. Supreme Court.

Legal experts have questioned the legality of Trump's threat to fire Powell, citing the Federal Reserve Act of 1913 which states that governors can only be fired for serious misconduct. Dan Urman, director of the law and public policy minor at Northeastern University, told CBS News that 'as the law currently stands, it is not legal for President Trump to fire Powell at any point — as chair or as governor — unless the firing is 'for cause'.' The Supreme Court is expected to hand down a decision by late June on whether a U.S. president has the legal authority to remove leaders of independent federal agencies.

Financial markets may react negatively if Trump follows through on his threat, according to Columbia Business School professor Brett House. Investors value the Fed's ability to steer monetary policy independently of political pressure.

The Wall Street Journal criticized Trump's threat in a scathing opinion piece, calling it 'self-destructive' and part of a presidential habit. The editorial board suggested that firing Powell would invite a legal fight and delay Warsh's confirmation. Senate Majority Leader John Thune (R-S.D.) expressed hope that the investigation would conclude before Warsh's nomination process.