Trump says he will fire Fed Chair Powell in May

President Donald Trump announced Wednesday he will remove Federal Reserve Chair Jerome Powell in May if Powell does not leave when his term ends, citing a Justice Department inquiry into a roughly $2.5 billion renovation of two historic office buildings and portions of Powell’s congressional testimony.

Trump said he had wanted to remove Powell earlier but delayed to avoid added controversy and described the chair as “overall incompetent.” He criticized the renovation costs, saying a project that may reach $4 billion could have been done for $25 million and urged investigators to determine what happened.

Prosecutors from the U.S. Attorney’s Office for the Southern District of New York visited the renovation site without prior notice and were told they could not enter without preclearance. They were given contact information for the Federal Reserve’s legal team. An outside lawyer for the Fed objected in a letter, asking that any communications with Powell occur in counsel’s presence and citing a federal judge’s decision that invalidated two subpoenas and said the inquiry appeared intended to “harass and pressure” Powell to lower interest rates or resign.

Trump has nominated former Fed governor Kevin Warsh to succeed Powell when the chair’s term ends in May. The nomination is advancing in the Senate; the Senate Banking Committee scheduled Warsh’s confirmation hearing for April 21. Committee chairman Tim Scott predicted the investigation would end within weeks and clear a path for Warsh but acknowledged he had no evidence to support that timetable.

Outgoing Republican Sen. Thom Tillis announced he would oppose confirming any Federal Reserve nominee, including a chair, until the Justice Department’s inquiry into Powell is fully and transparently resolved. Trump pushed back, noting Tillis is not seeking reelection and calling him a “good man.”

Powell’s current term expires in May. The Federal Reserve undertook the overhaul as part of a planned relocation of two nearby offices, and the project’s size and timing have drawn scrutiny.