White House letter sparks speculation over Federal Reserve Chair Jerome Powell’s future
A recent letter from the White House is raising eyebrows in Washington, with some analysts speculating it may be part of a broader push to remove Federal Reserve Chair Jerome Powell.
(CNN)- A recent letter from the White House is raising eyebrows in Washington — with some analysts speculating it may be part of a broader push to remove Federal Reserve Chair Jerome Powell. The letter, issued by the White House Office of Management and Budget (OMB), concerns planned renovations at the Federal Reserve’s headquarters. It accuses Powell of failing to comply with government oversight regulations and of misleading Congress about the nature of the project. Powell, however, pushed back on the claims.
“There’s no VPI dining room. There’s no new marble,” Powell said. “We took down the old marble; we’re putting it back up.”
A White House official has denied the letter is intended to lay the groundwork for Powell’s removal, but some political figures and analysts remain skeptical. “Clearly, they’re trying to make the case, and I actually think it makes sense,” said former Wisconsin Governor Scott Walker. “There’s a compelling policy argument. Whether they can legally do it before next year remains to be seen.”
President Donald Trump has not hidden his frustration with Powell, criticizing him repeatedly for not cutting interest rates.
“He should resign immediately,” Trump said. “We need someone who’s going to lower interest rates.”
But firing Powell for policy differences alone may not be legal. Supreme Court rulings protect the independence of the Federal Reserve, and forcibly removing the chair could send shockwaves through the financial markets. “He is going to make his life as miserable as possible,” said New York Times correspondent Maggie Haberman.
Powell has argued that the Fed may have already lowered rates — if not for Trump’s sweeping tariffs, which many economists say are inflationary. Still, the president insists tariffs benefit the country and plans to introduce more starting August 1st.
