White House exploring authority to fire Fed’s Powell: Official

WASHINGTON (Reuters): U.S. President Donald Trump could dismiss Federal Reserve (Fed) Chair Jerome Powell for cause if supported by evidence, White House economic adviser Kevin Hassett said on Sunday, noting that the Fed “has a lot to answer for” regarding cost overruns in the renovation of its Washington headquarters.

Any decision by Trump to try to fire Powell over what the Trump administration calls a $700 million cost overrun “is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed,” Hassett told ABC’s “This Week” program.

Vought, the White House budget director, last week slammed Powell over an “ostentatious overhaul” of the Fed’s buildings and answers to a series of questions about the $2.5 billion project. In a posting on social media platform X, he compared the project to France’s Palace of Versailles, with rooftop gardens, water features and “premium marble.”

Hassett’s comments confirm that the Trump administration is actively exploring the renovation costs and Powell’s testimony about the project as a possible avenue to try to fire the Fed chief well before his term as chair ends in May 2026.

Trump has repeatedly called for Powell’s resignation for failing to lower interest rates since Trump returned to office in January.

Vice President JD Vance piled on more criticism in a post on X on Sunday: “Fed has been totally asleep at the wheel. As President Trump says, they’re TOO LATE–both in fighting inflation during Biden and in lower rates now.”

Roof terrace no, asbestos yes

The Fed on Friday appeared to rebut some of Vought’s claims in a “Frequently Asked Questions” posting about the project, describing it as the first complete renovation of the buildings since their construction in the 1930s, including removing lead contamination and more asbestos than initially anticipated.

It shows pictures of leaky pipes and roofs and notes that costs have risen due to increased material, equipment and labor costs. It denied assertions that there were VIP dining rooms or elevators being installed.

The project will have a “green roof” using plants to help manage water runoff and aid with heating and cooling, as many other federal buildings have used for decades, but no terrace access.

“There are no new water features, there’s no beehives, and there’s no roof terrace gardens,” Powell told U.S. senators in testimony in June, denying excessive spending on the project.

Powell said the almost 90-year-old headquarters “was not really safe, and it was not waterproof,” while acknowledging cost overruns.

The Fed has said that the project, which includes upgrades to an adjacent building, will consolidate staff into a single campus and reduce off-site lease costs. As of February, a Fed Inspector General report estimated that costs had risen to $2.4 billion from an estimate of $1.9 billion two years earlier, a $500 million increase.

Authority debated

Asked if Trump had the authority to fire Powell, Hassett, whose name has emerged as a potential candidate to take over the Fed chair job, said: “That’s a thing that’s being looked into, but certainly if there’s cause, he does.”

Republican Representative French Hill, who chairs the powerful House Financial Services Committee, said Trump did not have the authority to fire the Fed chair, but Congress would continue to provide strong oversight of the central bank.

“Just because Congress created the Fed and that we believe that it should be independent in the setting of monetary policy, it doesn’t mean that it’s immune from criticism,” Hill told CBS’ Face the Nation.

“Every president since World War II has had choice words for the Fed chair when they’ve not been in sync with the direction of the president.”

Regime change

Separately on Sunday, Kevin Warsh, a former Fed Board of Governors member who is considered a potential candidate to replace Powell, said the U.S. central bank needs a “regime change” that goes beyond the chair position.

“The Fed has lost its way. It’s lost its way in supervision, it’s lost its way in monetary policy,” Warsh said in a Sunday interview on Fox’s Sunday Morning Futures program.

“We need regime change at the Fed, and that’s not just about the chairman. It’s about a whole range of people, it’s about changing their mindset and their models, and frankly, it’s about breaking some heads, because the way they’ve been doing business is not working.”