SRMED
Englishعربي
Englishعربي
President Donald Trump has escalated his long-standing feud with Federal Reserve Chair Jerome Powell, explicitly threatening to dismiss him amid allegations of financial irregularities in the central bank's headquarters renovation project. According to reports from Asharq Al-Awsat, the confrontation has reached a "bone-breaking" stage, with Trump questioning Powell's leadership and insisting he step down not just at the end of his term on May 15 but immediately. This comes as criminal investigations reportedly target the Federal Reserve, intensifying pressure on its independence.
The dispute traces back to a tense tour of the Fed's Washington headquarters last July, where Trump and Powell clashed publicly over soaring renovation costs. Trump highlighted how the project ballooned from an initial $2.7 billion to $3.1 billion, accusing Powell of mismanagement during the walkthrough in front of reporters, as captured in videos from Bloomberg Television and CBS Evening News. Powell pushed back, denying the president's figures and defending the upgrades to the aging buildings, which Trump—a former real estate developer—criticized as wasteful.
Trump's latest salvo, aired in a Fox News interview on April 15, ties these cost overruns to broader suspicions of incompetence at the Fed's top levels. He framed ongoing probes into the renovations as evidence against Powell, vowing not to tolerate his continued service on the Fed's board even after his chairmanship expires next month, according to coverage by Jovem Pan News. This marks a rare public escalation, with Trump positioning the investigations as a tool to oust Powell outright.
Legal experts debate whether Trump holds the authority to fire the Fed chair at will. The Federal Reserve Act allows removal of board members "for cause," typically interpreted as misconduct rather than policy disagreements, though no president has tested this in court. Asharq Al-Awsat directly poses the question of Trump's legal power, noting the unprecedented White House-Fed standoff without resolving it definitively.
This rift matters deeply because the Federal Reserve sets U.S. interest rates and steers the economy, and any perceived political interference could rattle global markets, erode investor confidence, and fuel inflation fears. Businesses, consumers borrowing at higher rates, and international trade partners—all affected by Fed decisions—watch closely as Trump's pressure mounts. Wall Street has already shown volatility in response to similar past spats.
What happens next remains uncertain. Powell's term ends May 15, but Trump could nominate a replacement sooner if he pursues dismissal, potentially sparking lawsuits or congressional backlash. Investigations into the renovations could yield findings that bolster Trump's claims or exonerate the Fed, further shaping the power struggle. For now, the standoff underscores enduring tensions over central bank autonomy in an era of populist economics.