Fed Chair stays for now as Trump weighs successor amid Justice probe

U.S. President Donald Trump said on Wednesday that he has no immediate plans to remove Federal Reserve Chair Jerome Powell, even as the Justice Department conducts a criminal investigation related to cost overruns at the central bank’s headquarters renovation project, according to Reuters.

Speaking to Reuters, Trump indicated that while Powell remains in his position for now, the situation is still evolving and no final decision has been made. The president suggested that the administration is in a wait-and-watch mode regarding Powell’s future, stressing that it is too early to determine any eventual course of action.

Powell’s current term as Federal Reserve chair is set to end in May, though he is entitled to remain on the Fed’s Washington-based Board of Governors until 2028. Reuters reported that Trump is considering potential successors, including former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett. Trump has ruled out Treasury Secretary Scott Bessent, indicating that Bessent prefers to continue in his current role. An announcement on the nomination is expected in the coming weeks, according to Reuters.


The developments come amid heightened scrutiny of the Federal Reserve’s independence. The Trump administration has launched a criminal probe into Powell over alleged cost overruns tied to a $2.5 billion renovation of two historic buildings at the Fed’s headquarters. Powell has denied any wrongdoing and has said the investigation is being used as a pretext to pressure him over his refusal to cut interest rates as aggressively as the president has demanded, Reuters reported.

The move has drawn criticism from several Republican senators, international economic officials, investors, and former U.S. government officials from both parties, many of whom have warned that the investigation risks politicising monetary policy. The administration, however, has maintained that it is obligated to investigate potential misconduct.

Trump, who originally appointed Powell during his first term, has repeatedly criticised the Fed chair for not lowering benchmark interest rates faster or further. With midterm congressional elections approaching, cost-of-living concerns have emerged as a major issue for voters, and Reuters noted that public surveys show mixed views on Trump’s handling of inflation-related pressures.

According to Reuters, Trump has brushed aside concerns from lawmakers and market participants about the implications of undermining central bank independence, including warnings that it could weaken the U.S. dollar or fuel inflation. He has also defended a more direct presidential role in shaping monetary policy, arguing that his background in business gives him a strong grasp of economic decision-making.

The standoff represents another test of the limits of presidential authority. During his current term, Trump has sought to remove other Federal Reserve officials as well, including Governor Lisa Cook, whose dismissal is now the subject of a legal challenge scheduled to be heard by the Supreme Court next week, Reuters reported.