Trump threatens to fire Powell if he stays on at Fed past May 15

President Donald Trump threatened to fire Federal Reserve Chair Jerome Powell if he remains on the Fed's board after his chairmanship expires May 15, while also insisting that a criminal investigation into Powell must continue — the same probe that is blocking Senate confirmation of his nominee to replace him.

"Then I'll have to fire him, OK? If he's not leaving on time — I've held back firing him. I've wanted to fire him, but I hate to be controversial," Trump said in an interview on Fox Business that aired this week.

Although Powell's chairmanship expires May 15, his seat on the Fed's Board of Governors runs through 2028. At a news conference last month, he told reporters he would not step down from the board while the DOJ probe remained unresolved, insisting on "transparency and finality." Should Warsh lack Senate confirmation by that date, Powell has indicated he would serve as acting chair, a position he said is supported by legal precedent.

Trump's nominee, former Fed Governor Kevin Warsh, has a Senate confirmation hearing scheduled for next week. But Sen. Thom Tillis, a North Carolina Republican and member of the Senate Banking Committee, has said he will not vote to advance the nomination as long as the Justice Department's criminal probe into Powell continues. His opposition is enough to block the nomination from clearing the committee.

At the center of the dispute is a probe overseen by Jeanine Pirro, the U.S. Attorney for the District of Columbia, examining allegations that Powell gave misleading testimony to Congress regarding ballooning expenses at the Fed's headquarters renovation. What began as a $1.4 billion project in 2019 has ballooned to an estimated $2.4 billion or more, according to CNBC. A federal judge has already moved to shut down grand jury subpoenas tied to the investigation, concluding that prosecutors had offered virtually no evidence of wrongdoing by Powell.

According to MarketWatch, investigators from Pirro's office arrived without warning at the Fed's ongoing construction site this week and were denied access. Defending the visit in a public statement, Pirro argued that a renovation running "almost 80% over the original construction budget" warranted scrutiny.

Trump said on Fox Business that the probe must go forward. "Does that mean we stop a probe of a building that I would have done for $25 million that's going to cost maybe $4 billion?" he said. Senate Majority Leader John Thune, a South Dakota Republican, said it would be "better if it winds down" before Warsh's confirmation proceeds.

The legal authority underlying any Trump move against Powell is far from settled. Statute limits presidential removal of Fed officials to situations involving demonstrated misconduct — a standard courts have not found to be met here. Separately, justices are still deliberating over Trump's bid to oust Fed Governor Lisa Cook, and that decision could shape whatever options the White House believes it has.

Trump's campaign to pressure the Fed has created a circular impasse: the DOJ investigation he supports is the obstacle preventing his own pick from being confirmed, potentially leaving Powell in place longer than Trump intended. Tillis has said the moment DOJ announces insufficient evidence to continue, "I will vote for Kevin Warsh."

Senate Minority Leader Chuck Schumer said this week that "there are no legitimate grounds for the president to remove the chair of the Federal Reserve for simply doing his job," adding that interference with the Fed risks pushing interest rates higher rather than lower.