Is the Federal Reserve’s top boss on the chopping block over a bloated renovation budget?
CNBC reported that the Trump administration is stirring the pot by exploring whether it can oust Federal Reserve Chair Jerome Powell before his term wraps up in May 2025, citing concerns over a $2.5 billion headquarters renovation that’s spiraled out of control.
Let’s rewind to when the heat on Powell turned up a notch. Top officials in the Trump camp have been vocal about their frustration with the Fed’s pricey project, which National Economic Council Director Kevin Hassett pegged as $700 million over budget.
Now, before anyone cries foul over taxpayer dollars, let’s be clear: the Fed funds itself through interest on securities and bank fees, not public money. Still, that doesn’t stop the sticker shock from raising eyebrows on the right, where fiscal responsibility isn’t just a buzzword—it’s a battle cry.
Hassett dropped a bombshell on ABC News’ “This Week,” hinting at the administration’s probe into whether Powell can be shown the door.
“But certainly, if there’s cause, he does,” Hassett said about Trump’s potential power to remove the chair. Cause or not, that’s a line that makes you wonder if the Fed’s independence is just a polite fiction.
Meanwhile, Office of Management and Budget Director Russell Vought didn’t mince words last week, accusing Powell of botching the Fed’s management. Vought’s push for a deep dive into the renovation debacle suggests the administration might be hunting for a reason to push Powell out early.
Vought even fired off a list of pointed questions to Powell, demanding clarity on the project’s ballooning costs. Hassett doubled down on Sunday, noting that the next move could hinge on Powell’s responses.
“I think that whether the president decides to push down that road or not is going to depend a lot on the answers,” Hassett remarked, leaving the door wide open for drama.
The Fed, perhaps sensing the storm, quietly updated its website with an FAQ page on Friday to address some of Vought’s queries. “No new VIP dining rooms,” the page insisted, debunking rumors of lavish extras. But does a webpage update really douse the fire of skepticism over a $700 million overrun?
That same Friday, Vought wasn’t buying the Fed’s low-key response, telling CNBC that a full probe into Powell’s oversight was justified. When even a FAQ can’t calm the waters, you know the scrutiny isn’t going away anytime soon.
Amid the uproar, President Trump has maintained he’s not itching to fire Powell—at least not yet. Still, Trump’s recent musings about having a shortlist of replacements for when Powell’s term ends in May 2025 suggest the chair’s seat isn’t exactly secure.
Names like Hassett himself and former Fed Governor Kevin Warsh are floating as possible contenders, per reports from The Wall Street Journal.
Warsh, speaking on Fox News, didn’t hold back, declaring, “The Fed has lost its way.” That’s a zinger that hits hard, especially when paired with his critique of the Fed’s focus on “fancy buildings” over core duties.
Warsh’s follow-up jab on Fox News cut deeper still. “It’s lost, lost its way in supervision, it’s lost its way in monetary policy,” he said, tying the renovation mess to broader failures. For conservatives wary of unchecked bureaucracies, that’s a rallying cry against business as usual.
Let’s not pretend this is just about a building project gone awry. The renovation saga taps into a deeper frustration on the right about institutions like the Fed drifting from their mission, especially when progressive policies often seem to get a free pass under the guise of modernization.
While Powell’s fate remains uncertain, the Trump administration’s pointed questions and public criticisms signal a broader push to hold the Fed accountable. If answers to Vought’s inquiries don’t satisfy, the pressure on Powell could escalate, term end or not.