Kevin Hassett, the Director of the National Economic Council, indicated on Sunday that the authority of President Trump to dismiss Federal Reserve Chair Jerome Powell is currently under examination.
Speaking on ABC News’ “This Week“, Hassett stated, “But certainly, if there’s cause, he does,” referring to Trump’s power to remove Powell before his term concludes next spring.
Recent days have seen heightened criticism from top officials in the Trump administration directed at Powell, particularly concerning a $2.5 billion renovation project for the Federal Reserve that, according to Hassett, has exceeded its budget by $700 million.
It is important to note that taxpayers are not responsible for the costs of the renovations; the Federal Reserve is funded through the interest on securities it holds and fees assessed to banks.
Last week, Russell Vought, the Director of the Office of Management and Budget, accused Powell of “grossly mismanaging the Fed” and stated he would pursue an investigation into the ongoing renovation at the Fed’s headquarters.
Vought’s comments suggest that the administration might be laying the groundwork to find justification for Powell’s removal, a recurring theme in the administration’s narrative against him.
In an act of escalation, Vought sent a series of questions to Powell last week, demanding accountability regarding the renovation project.
Hassett remarked that the administration’s next steps could hinge on the responses to Vought’s inquiries. “I think whether the president decides to push down that road or not will depend heavily on the answers that we get,” he stated.
In a timely response to Vought’s inquiries, the Federal Reserve updated its website last week to address some of the questions raised, stating, “No new VIP dining rooms are being constructed as part of the project.”
Despite Trump’s recent assertions that he does not wish to dismiss Powell, he has suggested that he has different candidates in mind for the position as Powell’s term nears its end in May.
Hassett has emerged as a prominent candidate for the role, along with former Fed Governor Kevin Warsh, as reported by The Wall Street Journal.
Warsh, who appeared on Finance Newso News’ “Mornings with Maria” on Sunday, appeared to subtly advocate for his candidacy, labeling the renovation project “outrageous” and suggesting that “the Fed has lost its way.”
He stated, “It’s lost, lost its way in supervision, it’s lost its way in monetary policy, and all this big money on big, fancy buildings is just another indication,” encapsulating the growing discontent regarding the Fed’s current trajectory.
