Trump threatens to fire Fed chair as criminal probe dims outlook of his departure

President Donald Trump has threatened to fire Federal Reserve Bank Chairman Jerome Powell if he remains on the board after his term as head expires next month — but he also defended the federal investigation that could sideline his own choice for the job.

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In an interview with Fox Business broadcast Wednesday, Trump said that if Powell remains on the Fed board after May 15, “then I’ll have to fire him, OK? If he doesn’t leave in time, I’ve held off on firing him. I’ve wanted to fire him, but I hate to be controversial.”

The May date is when Powell’s presidency will expire, but it is not yet clear whether he will do so.

Trump’s nominee for the post, Kevin Warsh, has a confirmation hearing scheduled for next week, but Sen. Thom Tillis, R-N.C., told NBC News Tuesday night that he would not vote to advance his nomination until the Justice Department drops its ongoing criminal investigation into Powell.

Tillis, a member of the Senate Banking Committee, said the investigation into Powell over costly renovations at Fed properties appears to have been launched solely to try to curry favor with the White House, and “I don’t want to reward bad behavior.”

“Kevin is a perfect candidate, and that’s why it’s so frustrating that someone at the DOJ, in February, decided that maybe he was going to curry favor with someone at the White House by trying to invoke a criminal investigation against Jerome Powell,” Tillis said, adding that the moment the DOJ announced that there was not enough evidence to pursue an investigation, “I will vote for Kevin Warsh.”

If the investigation continues, Tillis said, “I will not support a move out of committee. I don’t think there is a path outside of my vote.”

Senate Majority Leader John Thune, R-S.D., citing Tillis’ position, said, “I think it’s in everyone’s best interest to conclude the investigation.” »

“It would be better if this ends. A new man is brought in, very qualified. We’re obviously excited to have the opportunity to confirm that, but, you know, it would be great if we could end the prior cases before that happens,” Thune said.

Powell, whose term as board governor doesn’t expire until 2028, told reporters at a news conference last month that he has “no intention of leaving the board until the investigation is well and truly completed, transparently and definitively.”

And if Warsh isn’t confirmed by May 15, Powell said he could remain acting Fed chair.

Trump has repeatedly criticized Powell for refusing to lower interest rates as much as he would like, and had previously floated the idea of ​​firing him.

Fox Business host Maria Bartiromo asked if the easiest way to get rid of Powell would be to end the investigation led by U.S. Attorney for the District of Columbia Jeanine Pirro.

Trump acknowledged that would be the case, but said: “Does that mean we’re stopping an investigation into a building that I would have done for $25 million that will cost maybe $4 billion – don’t you think we need to find out what happened there?”

“This is more than a criminal investigation,” Trump said. “It’s a criminal investigation, I suppose, but it’s also an investigation into incompetence.”

“And so whether it’s incompetence or corruption or both, I think you have to find out. Really, I do. I think you have to find out,” the president said, before adding that he would fire Powell if he didn’t leave.

Trump also expressed optimism that Tillis would change his mind.

“He doesn’t want an incompetent man standing there any longer than necessary. I know Thom Tillis. He’s a good man. I don’t think he’s going to suffer. I know he said what he said, and maybe it’s true, in which case I’ll have to live with it,” Trump said.

Speaking on the Senate floor, Senate Minority Leader Chuck Schumer, D-N.Y., said, “There is no legitimate reason for the president to remove the chairman of the Federal Reserve simply because he is doing his job.” »

“The more you make fun of the Fed, the higher rates will be and you will want lower rates,” he added.

In January, the DOJ subpoenaed the Federal Reserve following Powell’s testimony before the Senate last year regarding renovations to the Fed’s office buildings, which were well over budget.

The initial estimate for renovations in 2019 was $1.4 billion, according to Fed documents. Their cost is now estimated at more than $2.4 billion.

Powell then blasted news of the investigation, saying the project had already been audited.

“The threat of criminal prosecution is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the president’s preferences,” Powell said.

Last month, Judge James Boasberg, chief judge of the U.S. District Court in Washington, D.C., blocked the subpoenas, saying “the government has produced virtually no evidence to suspect Chairman Powell of a crime.”

Pirro, however, apparently has not given up on the investigation.

Three officials from his office showed up at the construction site of the Fed’s headquarters in downtown Washington on Tuesday and said they wanted a “tour,” Robert Hur, an outside adviser to the central bank, told Pirro’s office in an email seen by NBC News.

Pirro suggested in a statement Tuesday evening that investigators were justified in attempting to inspect the renovation project.

“Any construction project whose costs exceed the original construction budget by nearly 80% deserves serious consideration,” she said. “And these people are in charge of monetary policy in the United States?

It’s unclear whether Trump would be able to fire Powell — something a president can only do “for cause,” that is, for some form of wrongdoing.

Earlier this year, the U.S. Supreme Court was skeptical of Trump’s efforts to fire another Federal Reserve board member, Lisa Cook. A decision in this case is pending.