Trump Threatens to Fire Fed Chair Powell

President Donald Trump has threatened to fire Federal Reserve Chair Jerome Powell if he does not step down by May 15, escalating tensions over monetary policy and a pending investigation into Fed headquarters renovations. According to multiple reports, Trump told Fox Business that while he had held back from firing Powell previously, he might have to do so if Powell remains beyond his term expiration.

The conflict stems from Powell's reluctance to cut interest rates despite repeated calls from Trump. The president has accused Powell of mishandling the Fed renovation project, alleging billions were spent unnecessarily. If fired, it would be unprecedented in Federal Reserve history.

Senator Thom Tillis (R-NC) is blocking the confirmation of Kevin Warsh as Powell's successor until a Department of Justice investigation into the renovations is resolved. Trump has expressed hope that Tillis will drop his opposition but has not indicated willingness to halt the probe, citing the need for accountability.

Warsh, Trump's nominee for Fed chair, recently submitted financial disclosures revealing assets worth over $100 million. The filings detail significant investments in various sectors, including AI and crypto. Warsh has pledged to divest these holdings if confirmed. His confirmation hearing is scheduled for April 21.

According to CNBC, Kevin Warsh's financial disclosures shed light on his vast wealth but also raise questions about parts of his holdings that aren't fully revealed in the paperwork. Warsh disclosed owning assets worth roughly $135 million to $226 million, with two individual assets each listed as simply being worth over $50 million. Senator Elizabeth Warren (D-Mass.) called attention to these undisclosed holdings, stating that it is not possible to understand his entanglements without full disclosure.

Former Federal Reserve Chair Janet Yellen has criticized Trump's push for lower interest rates, comparing it to actions typical of a 'banana republic.' She also questioned Warsh's credibility as a potential Fed chair. Meanwhile, San Francisco Federal Reserve President Mary Daly defended the independence of regional Fed banks.

As reported by Reuters, there are growing doubts that Warsh will win confirmation from the full Senate by May 15. Republican Senator Thom Tillis has vowed to block the process until the Department of Justice ends its investigation into Powell's oversight of renovations to the Fed's headquarters in Washington, D.C.

The White House could try to appoint another Fed governor, such as Stephen Miran, Trump's former economic advisor, in Powell's place. However, analysts note that such a move might not hold up in court and could shake market confidence in the Fed. With high oil prices from the Iran war pushing up inflation, the Fed is seen as unlikely to deliver a rate cut anytime soon.