Donald Trump has intensified his confrontation with the Federal Reserve, warning he could dismiss its chair Jerome Powell and refusing to halt a criminal investigation into him.
Speaking in an interview with Fox Business, Trump said that if Powell does not step down when his term ends on May 15, he would consider removing him from the position.
Powell has indicated he may remain on the Federal Reserve’s board even after his term as chair expires, particularly if his potential successor, Kevin Warsh, is not confirmed in time.
The situation has been further complicated by opposition within Trump’s own party. Several Republican senators, led by Thom Tillis, have signaled they may block Warsh’s confirmation until the investigation into Powell is concluded.
The criminal probe focuses on the management of a $2.5 billion renovation project at the Federal Reserve’s headquarters in Washington. Trump has insisted the investigation must continue to determine whether there was “incompetence, corruption, or both,” while critics argue it is being used as a tool to pressure the central bank.
A federal judge, James Boasberg, has previously blocked certain prosecutorial actions, warning that the investigation could be leveraged to influence Powell’s stance on interest rates. Legal representatives of the Federal Reserve have also raised concerns over how the probe is being conducted.
Former Fed chair and Treasury Secretary Janet Yellen has described the situation as an unprecedented threat to central bank independence, noting that it is highly unusual for a leader of a developed country to publicly pressure monetary policy for political ends.
The dispute has raised concerns in global financial markets and among central banks worldwide, where the independence of the Federal Reserve is widely regarded as a cornerstone of international financial stability.
