Trump walks back idea of firing Fed Chair Jerome Powell
President Trump told top GOP lawmakers late Tuesday that he will likely fire Fed Chair Jerome Powell, sources said — but the president walked back the idea on Wednesday, calling it “highly unlikely.”
Two sources who spoke to The Post anonymously confirmed an earlier report by Bloomberg News, citing people familiar with the matter, which said Trump discussed the plan with GOP lawmakers in Congress on Tuesday.
An administration insider close to the commander-in-chief, speaking on the condition of anonymity, confirmed to The Post the nature of those talks with congressional Republicans.
“They expressed approval for firing him. The president indicated he likely will soon,” the source said.
But after headlines about Trump’s conversation with GOP lawmakers surfaced on Wednesday, Trump downplayed the situation to reporters at the White House. He also denied a New York Times report that he had drafted a letter to fire Powell.
“We’re not planning on doing anything,” Trump said. “I don’t rule out anything, but I think it’s highly unlikely. Unless he has to leave for fraud.”
The president added, however, that he might try to remove Powell for cause over a lavish, $2.5 billion renovation of the Fed’s headquarters that was exclusively reported on by The Post.
The headlines sent the Dow yo-yoing on Wednesday — plunging nearly 800 points following the initial headlines and then bouncing back after Trump tamped down speculation at the White House. The blue-chip index was recently down 24.63 points at 43.998,66.
Some sources suggested this latest move was a ploy to turn the screws on the man whom the president appointed in 2018.
“I think this is all pressure for him to go voluntarily,” one administration bigwig told The Post.
The news comes as Powell came under fire for refusing to cut interest rates despite Trump’s relentless demands.
It also follows what one senior administration official branded “deceptive” testimony by the Fed chair to the Senate Banking Committee on June 25 about the central bank’s $2.5 billion “Palace of Versailles” revamp of its DC headquarters.
Critics compared the glorified vanity project to the French monarchy’s former residence, which has seen costs balloon by 30% from an initial estimate of $1.9 billion.
Powell, facing questioning by GOP lawmakers including Senate Banking Committee Chairman Tim Scott (R-SC), denied The Post’s exclusive reporting about the lavish renovations to the Fed’s offices.
The 72-year-old trashed this newspaper’s coverage of the scandal as “misleading and inaccurate” despite directly contradicting the project’s own planning documents that were signed off on in 2021.
Former DOGE chief Elon Musk referred to The Post’s original story on the renovations as “an eyebrow raiser” that could be investigated.
The work was rubber-stamped at the height of the coronavirus pandemic when many ordinary Americans were battling rampant inflation under the Biden-Harris administration.
It is now effectively being bankrolled by US taxpayers, given the Fed’s mounting losses, which have topped just over $220 billion.
When America’s central bank is in the black, the profits are then transferred to the Treasury to help pay for this nation’s defense, Medicare and Social Security.
A separate administration official told The Post that White House counsel believes the Fed broke DC planning regulations by not submitting any revisions to the National Capital Planning Commission.
“The Federal Reserve Act authorizes the President to fire a top Fed official for ‘inefficiency,’ which refers to gross mismanagement of public funds, or ‘malfeasance,’ which refers to violations of law,” said Andrew T. Levin, a professor of economics at Dartmouth College and a former senior Fed official.
A White House spokesman declined to comment. A Fed spokesman pointed to remarks Powell made on April 4 that he “intends” to see out his full term, which expires in May next year.