Trump demands Powell resign as pressure mounts over Fed renovation
US President Donald Trump calls on Federal Reserve Chair Jerome Powell to resign amid mounting political pressure over the Federal Reserve's $2.5 billion headquarters renovation.
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Federal Reserve Board Chairman Jerome Powell arrives before a Senate Committee on Banking hearing on June 25, 2025, on Capitol Hill in Washington. (AP Photo/Julia Demaree Nikhinson)
US President Donald Trump has reignited his long-standing feud with Federal Reserve Chair Jerome Powell, calling for his immediate resignation in a blunt Truth Social post on Thursday. Sharing an article about a federal housing regulator's call for Powell to be investigated, Trump wrote: "'Too Late' should resign immediately!!!"
The demand comes amid mounting political pressure over the Federal Reserve's $2.5 billion headquarters renovation and ongoing tensions over monetary policy. Although Trump initially nominated Powell to lead the central bank during his first term, their relationship has steadily deteriorated. Trump has repeatedly criticized Powell for refusing to lower interest rates, which he believes would help spur economic growth.
That frustration deepened recently when Powell, speaking at a central bank gathering in Portugal, directly linked the Fed's hesitancy to cut rates to the Trump administration's global tariff hikes. Asked whether rates would have been lowered this year without those policies, Powell responded: "I think that's right."
Power struggle
The Federal Reserve has not responded to Trump's latest comments. Powell, whose term as chair runs through May 2026, was renominated by former President Joe Biden and has previously stated that he would not step down if asked. He noted that the law does not allow the president to remove a Fed chair without cause, stating such a move is "not permitted under law."
That legal stance is supported by a 1935 Supreme Court ruling, which held that the heads of independent federal agencies like the Federal Reserve can only be removed "for cause." This protection is considered essential for maintaining the central bank's independence from political interference.
Nevertheless, Trump has shown a consistent willingness to challenge institutional boundaries. During his first term, he explored demoting Powell and frequently attacked him in public, at times calling him "clueless" and even an "enemy." According to reports, Trump recently sent Powell a handwritten note blaming him for economic damage and demanding sharp rate cuts: "You should lower the rate—By A Lot!"
Policy clash
Adding fuel to the controversy, Federal Housing Finance Agency Director Bill Pulte echoed Trump's criticism on Wednesday. "I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed 'for cause'," Pulte posted on X.
Pulte was referring to Powell's testimony regarding the Fed's ongoing headquarters renovation, which has drawn criticism for its projected costs and luxury features. During a Senate hearing, Powell denied allegations of excessive spending, calling media reports on the matter "misleading and inaccurate in many, many respects."
Jay Powell is supposed to run the Federal Reserve, not build a modern-day Versailles. His inability to set aside his own biases in favor of sound policies proves we need new leadership at the Fed.
— Senator Cynthia Lummis (@SenLummis) July 3, 2025
Grateful @POTUS will hold him accountable for Operation Chokepoint 2.0
While Trump advocates for aggressive rate cuts to boost growth and stabilize financial markets, Powell has maintained that premature easing could reignite inflation. He insists that monetary policy decisions must be guided by economic data rather than political pressure, emphasizing that ongoing uncertainty, particularly around trade policy and inflation, calls for a cautious approach.
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