July 16, 2025 • 9 mins
US President Donald Trump is stepping up pressure on Federal Reserve Chair Jerome Powell, with a White House official saying he discussed firing the central bank chief in a meeting with congressional Republicans on Tuesday night. Speaking on Wednesday, Trump said he’s “not planning” to remove the Fed chief, but he has repeatedly criticised Powell’s actions on interest rates. Removing a Fed governor is legally difficult and would be likely to roil markets. Our Federal Reserve reporter Amara Omeokwe joins host Stephen Carroll to discuss.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. I'm Stephen Carol and
this is Here's Why, where we take one news story
and explain it in just a few minutes with our
experts here at Bloomberg. You should resign immediately. We should
get somebody in there that's going to lower interest rate.
(00:23):
It's always too late, a little slow, and I'm not
happy with him. Too late. I him too late Powell,
because he's always too late.
Speaker 2 (00:29):
Too late Powell, that's his nickname, and it's a shame.
Speaker 1 (00:32):
It's ridiculous. I mean, he goes out pretty so unfortunately,
because I think he's terrible.
Speaker 2 (00:36):
Do you ever have a guy that's.
Speaker 1 (00:37):
Not a smart person and you're dealing with him and you.
Speaker 2 (00:39):
Have to deal he's not a smart guy.
Speaker 1 (00:41):
I'd love him to resign if you want to taste
it done, lousy.
Speaker 2 (00:44):
Jump and the fake news is saying, oh, if you
fired him, it would be so bad. It would be
so bad. I don't know why it would be so bad.
Speaker 1 (00:53):
It's become one of the US President's most common complaints.
Donald Trump wants lower interest rates and he thinks Federals
serve Chair Jerome Powell isn't doing it fast. Enough. Powell's
term heading up the US Central Bank runs until May
of next year, but the President and his allies are
taking every opportunity to criticize him. A recent controversy over
(01:13):
the renovation of a Federal Reserve building has again raised
the question of whether Trump could remove the FED chair
before his term is up. But here's why it's not
easy to fire Jerome Powell. Our Federal Reserve reporter Amara
Mackway joins me now for more. Amara, great to talk
to you. We've spoken before about Donald Trump criticizing Jerome Powell.
(01:37):
Have those complaints changed since he returned to the White House?
Speaker 2 (01:41):
So, essentially, no, they haven't. President Donald Trump, since he
returned to office in January, has essentially been upset with
the Federal Reserve because they have not lowered interest rates
so far this year, and so his criticisms of Chair
Powell and the FED largely center around this idea that
he wants lower rates and the FED has not provided
that for him this year. Those really mirror some of
(02:02):
the same complaints that he had about Powell and the
FED during his first term. He often called for lower
rates during his first term, but this time the complaints
have been really really relentless, and they've also taken on
sort of this personal nature where President Trump has basically
started calling Jerome Powell various names. He's given him the
(02:23):
nickname too Late to basically suggest that Chair Pal is
often too late to make policy adjustments, and various other names.
So the attacks have gone beyond sort of Chair Powell's
stance on interest rates to kind of the more personal nature.
And then, as you were talking about in the intro,
this new line of attack is about this two and
a half billion dollar renovation project that the FED is
(02:44):
undergoing now at its headquarters in Washington, d C. And
that has opened up a new line of criticism from
President Trump and some of his allies.
Speaker 1 (02:52):
So how far has the President gone and saying that
he wants to remove Jerome Powell from his job.
Speaker 2 (02:57):
So most recently the President had has kind of said
again that he does not plan to remove chair Pal
from his job. Earlier in the year, he had posted
on social media that Chair Power's termination cannot come fast enough,
and that had sort of made people speculate about whether
he would try to remove him. But then the market's
freaked out a little bit, and so he kind of
backed off of that and has continued to say that
(03:19):
he's going to allow Chair Power to continue to serve
in his role. But what's interesting about this renovation project
is that some of the people in Trump's orbit have
started to suggest that the issue could amount to cause
to fire Jerome Powell, which is a legal term around
the FED. There is this very high legal standard in
(03:41):
order to be able to remove someone from the Federal
Reserves Board of Governor, you need to have what's called cause,
and the courts have generally taken that to mean like
malfeasance or neglect of duty. So the fact that someone
in the Trump administration is saying that this issue could
amount to cause has cause people to start to wonder, Okay,
(04:02):
are people in Trump's world trying to kind of lay
the groundwork to say, you know, President Trump, if you
wanted to remove him, you could you could have had
the ability to do that because this issue has given
you the cause. So there's been some speculation about that,
despite the fact that publicly President Trump has continued to
say he does not plan to remove Chair Pal.
Speaker 1 (04:22):
So let's talk about this renovation issue. Then, what do
we know about what's happened and whether or not it
could meet that legal definition.
Speaker 2 (04:30):
So I will say the legal experts that I've talked
to about this issue say that they do not think
that it rises to the level of cause. But essentially
what has happened is that in recent weeks, this renovation
project that the feed has been doing really for several
years has come to the forefront again. So there was
a media report that characterized this renovation as very extravagant.
(04:52):
They called it essentially the Palace of Versailles, which, if
you know, the Palace of Versailles, very ornate, huge, right
Louis the fourteenth and so so that kind of brought
this issue to the forefront. So when Chair Pale was
on the hill last month testifying before senators, he was
asked about this and he kind of disputed some of
what that media report was talking about. He talked about,
(05:14):
you know, we don't have these ornate features, we don't
have a bunch of new marble, we don't have, you know,
elevators going up to private dining rooms, really kind of
pushing back on this idea that the project is overly ornate.
And so what we then saw after the hearing was
one of the Trump administration officials. Bill Pulte, who's the
head of one of the federal housing agencies, come out
(05:35):
and say that he felt that Chairpal had not been
honest during that testimony about some of these features, and
that's what he's saying rises to the level of cause.
And then he had Russ Vote of the Office of
Management and Budget at the White House last week come
out and send a letter to Chair Pale again saying
like this doesn't add up, like we're very concerned about this,
(05:56):
I want you to answer several questions about this project.
And then Vote said that that Pal had also grossly
mismanaged the FED, so again kind of strong language, kind
of suggesting that Pal had done something wrong. And that's
again what's kind of driving this speculation that maybe they're
trying to set up this cause to remove him. But
what the FED says is that this again, this renovation
(06:17):
has been going on for several years. It involves two
historic buildings, and so that requires like a lot of
they have to sort of adhere to the laws around
preserving historic buildings. They have to take a lot of
steps to make sure that these buildings aren't armed. And
also the FED has said that these renovation projects will
allow them to put all their staff kind of consolidate
their staff all in one place, and that will save
(06:37):
money over the long term. So really like a lot
of this is in the eyes of the beholder. If
you want to kind of go after Pal and the FED,
you're using this as your opportunity. But the Fed, they're
really just pushing back against this idea that it's like
overly extraving it.
Speaker 1 (06:50):
Has John, however, indicated that he might give in to
all of this pressure and actually resigned from the job
no indication whatsoever.
Speaker 2 (06:59):
He has said several times previously that he plans to
serve out the duration of his chair term. And if
you take the face the FED at its word, and
they have said that Chairpal was honest in his testimony.
They've said that they are happy to be transparent about
this project and provide more information about it. They don't
feel like they've done anything wrong. So if you take
(07:20):
the Fed at its word, and you take what Chaerpal
has said about intending to serve out the duration of
his term, it really doesn't seem like he's going to
give into this pressure at all.
Speaker 1 (07:29):
So one of the indications are that Jerome Powell will serve,
as you say, to the end of his term. Scott Bessant,
the US Treasury Secretary, has said the formal process to
find his replacement has started. When should we expect Donald
Trump to name someone? And is there then a question
that Jerome Powell becomes some sort of lame duck if
we already know who's going to replace him.
Speaker 2 (07:49):
Yeah, So besson has said that this process is going
to be going on in the weeks and months, and
I think trying to game out when President Trump is
going to do anything, it's kind of not aw right.
He's known to change his mind on things, to go
back and forth on things. We've seen that on a
number of issues, and so who knows. But I will
(08:09):
say that an interesting question that has also come up.
So Chairpowell's term as chair is up in May twenty
twenty six, but his term as a governor on the
FED Board goes on into twenty twenty eight, and so
that actually means that Chair pal has the option to
stay on the FED Board even after his chair term
is up. And when he's been asked whether he does
(08:30):
intend to stay on the board even when he's no
longer chair, he has declined to answer. So that has
raised some eyebrows, like, hmm, is he is he going
to stay on the board to kind of safeguard in
case President Trump picks someone who is seen as a
potential threat to FED independence, so he can stay there
and kind of hold the line against someone like that.
And so that is another sort of wrinkle that has
(08:53):
come up for the Trump administration as they begin the
selection process. And you saw a Treasury secretary best and
say yesterday chairpal should lead when his chair term is up,
you should not stay because obviously if he stays on
the board, then that creates question about where the real
sort of nexus of power and influence live even after
the president names who he wants to take over the
(09:14):
chair role. So a lot of interesting wrinkles in this
whole process is starting to come up.
Speaker 1 (09:20):
Yeah, and we'll watch the developments with interest. Our Federal
Reserve reporter Amara Amaqway, thank you very much for joining us.
For more explanations like this from our team of three
thousand journalists and analysts around the world, go to Bloomberg
dot com slash explainers. I'm Stephen Caroll. This is here's why.
I'll be back next week with more. Thanks for listening,
Bloomberg Audio Studios, podcasts, radio news. I'm Stephen Carol and
this is Here's Why, where we take one news story
and explain it in just a few minutes with our
experts here at Bloomberg. You should resign immediately. We should
get somebody in there that's going to lower interest rate.
(00:23):
It's always too late, a little slow, and I'm not
happy with him. Too late. I him too late Powell,
because he's always too late.
Speaker 2 (00:29):
Too late Powell, that's his nickname, and it's a shame.
Speaker 1 (00:32):
It's ridiculous. I mean, he goes out pretty so unfortunately,
because I think he's terrible.
Speaker 2 (00:36):
Do you ever have a guy that's.
Speaker 1 (00:37):
Not a smart person and you're dealing with him and you.
Speaker 2 (00:39):
Have to deal he's not a smart guy.
Speaker 1 (00:41):
I'd love him to resign if you want to taste
it done, lousy.
Speaker 2 (00:44):
Jump and the fake news is saying, oh, if you
fired him, it would be so bad. It would be
so bad. I don't know why it would be so bad.
Speaker 1 (00:53):
It's become one of the US President's most common complaints.
Donald Trump wants lower interest rates and he thinks Federals
serve Chair Jerome Powell isn't doing it fast. Enough. Powell's
term heading up the US Central Bank runs until May
of next year, but the President and his allies are
taking every opportunity to criticize him. A recent controversy over
(01:13):
the renovation of a Federal Reserve building has again raised
the question of whether Trump could remove the FED chair
before his term is up. But here's why it's not
easy to fire Jerome Powell. Our Federal Reserve reporter Amara
Mackway joins me now for more. Amara, great to talk
to you. We've spoken before about Donald Trump criticizing Jerome Powell.
(01:37):
Have those complaints changed since he returned to the White House?
Speaker 2 (01:41):
So, essentially, no, they haven't. President Donald Trump, since he
returned to office in January, has essentially been upset with
the Federal Reserve because they have not lowered interest rates
so far this year, and so his criticisms of Chair
Powell and the FED largely center around this idea that
he wants lower rates and the FED has not provided
that for him this year. Those really mirror some of
(02:02):
the same complaints that he had about Powell and the
FED during his first term. He often called for lower
rates during his first term, but this time the complaints
have been really really relentless, and they've also taken on
sort of this personal nature where President Trump has basically
started calling Jerome Powell various names. He's given him the
(02:23):
nickname too Late to basically suggest that Chair Pal is
often too late to make policy adjustments, and various other names.
So the attacks have gone beyond sort of Chair Powell's
stance on interest rates to kind of the more personal nature.
And then, as you were talking about in the intro,
this new line of attack is about this two and
a half billion dollar renovation project that the FED is
(02:44):
undergoing now at its headquarters in Washington, d C. And
that has opened up a new line of criticism from
President Trump and some of his allies.
Speaker 1 (02:52):
So how far has the President gone and saying that
he wants to remove Jerome Powell from his job.
Speaker 2 (02:57):
So most recently the President had has kind of said
again that he does not plan to remove chair Pal
from his job. Earlier in the year, he had posted
on social media that Chair Power's termination cannot come fast enough,
and that had sort of made people speculate about whether
he would try to remove him. But then the market's
freaked out a little bit, and so he kind of
backed off of that and has continued to say that
(03:19):
he's going to allow Chair Power to continue to serve
in his role. But what's interesting about this renovation project
is that some of the people in Trump's orbit have
started to suggest that the issue could amount to cause
to fire Jerome Powell, which is a legal term around
the FED. There is this very high legal standard in
(03:41):
order to be able to remove someone from the Federal
Reserves Board of Governor, you need to have what's called cause,
and the courts have generally taken that to mean like
malfeasance or neglect of duty. So the fact that someone
in the Trump administration is saying that this issue could
amount to cause has cause people to start to wonder, Okay,
(04:02):
are people in Trump's world trying to kind of lay
the groundwork to say, you know, President Trump, if you
wanted to remove him, you could you could have had
the ability to do that because this issue has given
you the cause. So there's been some speculation about that,
despite the fact that publicly President Trump has continued to
say he does not plan to remove Chair Pal.
Speaker 1 (04:22):
So let's talk about this renovation issue. Then, what do
we know about what's happened and whether or not it
could meet that legal definition.
Speaker 2 (04:30):
So I will say the legal experts that I've talked
to about this issue say that they do not think
that it rises to the level of cause. But essentially
what has happened is that in recent weeks, this renovation
project that the feed has been doing really for several
years has come to the forefront again. So there was
a media report that characterized this renovation as very extravagant.
(04:52):
They called it essentially the Palace of Versailles, which, if
you know, the Palace of Versailles, very ornate, huge, right
Louis the fourteenth and so so that kind of brought
this issue to the forefront. So when Chair Pale was
on the hill last month testifying before senators, he was
asked about this and he kind of disputed some of
what that media report was talking about. He talked about,
(05:14):
you know, we don't have these ornate features, we don't
have a bunch of new marble, we don't have, you know,
elevators going up to private dining rooms, really kind of
pushing back on this idea that the project is overly ornate.
And so what we then saw after the hearing was
one of the Trump administration officials. Bill Pulte, who's the
head of one of the federal housing agencies, come out
(05:35):
and say that he felt that Chairpal had not been
honest during that testimony about some of these features, and
that's what he's saying rises to the level of cause.
And then he had Russ Vote of the Office of
Management and Budget at the White House last week come
out and send a letter to Chair Pale again saying
like this doesn't add up, like we're very concerned about this,
(05:56):
I want you to answer several questions about this project.
And then Vote said that that Pal had also grossly
mismanaged the FED, so again kind of strong language, kind
of suggesting that Pal had done something wrong. And that's
again what's kind of driving this speculation that maybe they're
trying to set up this cause to remove him. But
what the FED says is that this again, this renovation
(06:17):
has been going on for several years. It involves two
historic buildings, and so that requires like a lot of
they have to sort of adhere to the laws around
preserving historic buildings. They have to take a lot of
steps to make sure that these buildings aren't armed. And
also the FED has said that these renovation projects will
allow them to put all their staff kind of consolidate
their staff all in one place, and that will save
(06:37):
money over the long term. So really like a lot
of this is in the eyes of the beholder. If
you want to kind of go after Pal and the FED,
you're using this as your opportunity. But the Fed, they're
really just pushing back against this idea that it's like
overly extraving it.
Speaker 1 (06:50):
Has John, however, indicated that he might give in to
all of this pressure and actually resigned from the job
no indication whatsoever.
Speaker 2 (06:59):
He has said several times previously that he plans to
serve out the duration of his chair term. And if
you take the face the FED at its word, and
they have said that Chairpal was honest in his testimony.
They've said that they are happy to be transparent about
this project and provide more information about it. They don't
feel like they've done anything wrong. So if you take
(07:20):
the Fed at its word, and you take what Chaerpal
has said about intending to serve out the duration of
his term, it really doesn't seem like he's going to
give into this pressure at all.
Speaker 1 (07:29):
So one of the indications are that Jerome Powell will serve,
as you say, to the end of his term. Scott Bessant,
the US Treasury Secretary, has said the formal process to
find his replacement has started. When should we expect Donald
Trump to name someone? And is there then a question
that Jerome Powell becomes some sort of lame duck if
we already know who's going to replace him.
Speaker 2 (07:49):
Yeah, So besson has said that this process is going
to be going on in the weeks and months, and
I think trying to game out when President Trump is
going to do anything, it's kind of not aw right.
He's known to change his mind on things, to go
back and forth on things. We've seen that on a
number of issues, and so who knows. But I will
(08:09):
say that an interesting question that has also come up.
So Chairpowell's term as chair is up in May twenty
twenty six, but his term as a governor on the
FED Board goes on into twenty twenty eight, and so
that actually means that Chair pal has the option to
stay on the FED Board even after his chair term
is up. And when he's been asked whether he does
(08:30):
intend to stay on the board even when he's no
longer chair, he has declined to answer. So that has
raised some eyebrows, like, hmm, is he is he going
to stay on the board to kind of safeguard in
case President Trump picks someone who is seen as a
potential threat to FED independence, so he can stay there
and kind of hold the line against someone like that.
And so that is another sort of wrinkle that has
(08:53):
come up for the Trump administration as they begin the
selection process. And you saw a Treasury secretary best and
say yesterday chairpal should lead when his chair term is up,
you should not stay because obviously if he stays on
the board, then that creates question about where the real
sort of nexus of power and influence live even after
the president names who he wants to take over the
(09:14):
chair role. So a lot of interesting wrinkles in this
whole process is starting to come up.
Speaker 1 (09:20):
Yeah, and we'll watch the developments with interest. Our Federal
Reserve reporter Amara Amaqway, thank you very much for joining us.
For more explanations like this from our team of three
thousand journalists and analysts around the world, go to Bloomberg
dot com slash explainers. I'm Stephen Caroll. This is here's why.
I'll be back next week with more. Thanks for listening,
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