Trump threatens to fire Fed Chair Powell if he doesn't resign

• Key insight: President Donald Trump says he will remove Fed Chair Jerome Powell from the central bank if he does not leave after his term expires on May 16. Trump also said his administration will not drop its probe into Powell over renovations at the central bank's headquarters.
  
• Expert quote: "I'll have to fire him if he's not leaving on time. I've held back firing him. I wanted to fire him, but I hate to be controversial." — President Donald Trump
  
• What's at stake: President Donald Trump's refusal to drop a criminal probe into Fed Chair Jerome Powell could delay the confirmation of Kevin Warsh, Trump's pick to lead the central bank.

President Donald Trump threatened to fire Federal Reserve Chair Jerome Powell if he remains at the central bank beyond the end of his term in May, escalating the president's years-long conflict with the central bank.

In an interview with Maria Bartiromo on Fox Business Wednesday morning, Trump called Powell "a disaster" and signaled he would seek to remove him from the Board of Governors if he does not step down voluntarily.

"I'll have to fire him if he's not leaving on time," Trump said. "I've held back firing him. I wanted to fire him, but I hate to be controversial. I want to be uncontroversial."

Powell's term as chair ends May 15, though his term as Governor does not expire until 2028. Fed chairs may remain on an acting basis pending the confirmation of a successor; Powell himself served as acting chair while the Senate considered his renomination in 2022. Powell has stated his intent to stay at his post until a successor has been confirmed and said he would remain on the Fed board until a Justice Department investigation into him has concluded. 

Trump said during Wednesday's interview that his administration would not drop its criminal probe into Powell over renovations at the central bank headquarters.

"It's a criminal probe, but it's also a probe into incompetence," said Trump. 

Trump, during the interview, boasted that if he was in charge of renovating the Federal Reserve's headquarters it would've cost a mere $25 million not over $2 billion.

"Whether it's incompetence, corruption or both, I think you have to find out. I really do. I think you have to find out," he said.

Two prosecutors working under Jeanine Pirro, the U.S. attorney for Washington, D.C., made an unannounced visit to Federal Reserve headquarters Tuesday to review the renovations, according to reporting by The Wall Street Journal. The prosecutors were turned away due to safety concerns.After the visit, Robert Hur, the central bank's outside counsel, wrote in an email viewed by American Banker that the prosecutors "appeared without prior notice at the Federal Reserve's construction site" and requested a tour to "check on progress."

"As you know, Chief Judge Boasberg has concluded that your interest in the Federal Reserve's renovation project was pretextual," Hur wrote in an email to Pirro's office. "Should you wish to challenge that finding, the courts provide an avenue for you; it is not appropriate for you to try to circumvent it."In March, Boasberg dismissed the probe into Federal Reserve Chair Jerome Powell over renovations at the central bank, highlighting that the Trump administration had not revealed any evidence to suggest Powell had committed a crime, noting that a "mountain of evidence" instead suggests the effort was a pressure campaign to push Powell to lower interest rates or resign. Pirro called the decision "outrageous" and said the Justice Department would appeal, though that appeal has not yet been filed.

Trump has already attempted to remove Fed Gov. Lisa Cook from the central bank board last August over as-yet unsubstantiated claims of mortgage fraud. In response, Cook sued the Trump administration in the U.S. District Court of Columbia over what she claimed was an illegal attempt to oust her. The Supreme Court is currently deciding whether Cook can remain in her post while her litigation against Trump unfolds. 

Trump's refusal to drop the investigation into Powell could complicate the confirmation process for Kevin Warsh, his nominee to lead the Fed.

Warsh's nomination made procedural progress Tuesday as the administration submitted his ethics paperwork to the Senate Banking Committee, allowing the panel to schedule a confirmation hearing. Committee Chairman Tim Scott, R-S.C., said in a Fox Business interview that he believed Warsh would be confirmed; a hearing has been scheduled for April 21.

The outcome of the confirmation process, however, remains uncertain. Sen. Thom Tillis, R-N.C., a member of the committee, has said he will oppose Warsh unless the Justice Department investigation into Powell is dropped.

Trump dismissed concerns that Tillis could slow the process, saying the senator is "an American" who "knows what to do."

"[Tillis] quit, and I think he doesn't want the legacy of stopping a great person who could be great," Trump said. "I think Kevin Warsh is going to be great. He doesn't want the legacy of having an incompetent guy stay there for longer than is necessary.

"I know he said what he said, and maybe it's true, in which case I'll have to live with it, but not as chairman," Trump added. "This guy is a bad chairman, really bad chairman, and I was surprised when Biden extended him, to be honest with you."

Trump said he expects interest rates to fall after Warsh is confirmed.