WASHINGTON — President Donald Trump said in a Wednesday interview with Reuters that he has no plan to fire Federal Reserve Chair Jerome Powell, even as the Justice Department opened a criminal investigation into the central bank’s $2.5 billion headquarters renovation. Trump brushed aside warnings that the probe could erode Fed independence and said senators criticizing the move “should be loyal” as he moves toward naming a successor for Powell’s term that ends in May, Jan. 15, 2026.
Jerome Powell and the Justice Department probe
Powell disclosed that federal prosecutors served the Fed with grand jury subpoenas tied to his June testimony before the Senate Banking Committee. In a rare public statement released by the Federal Reserve, Jerome Powell said he respects the rule of law but called the threat of criminal charges “unprecedented” and argued it should be viewed in the context of White House pressure on interest-rate policy.
The investigation centers on whether Powell misled lawmakers about the scope and cost of the renovation, according to an ABC News explainer. Powell has denied wrongdoing and has framed the inquiry as an attempt to intimidate the Fed as it sets rates to curb inflation while avoiding a sharper slowdown.
The move has drawn pushback from some Republican lawmakers, economists and former officials who say criminal scrutiny of a sitting central bank chief risks politicizing monetary policy. The Associated Press reported that the subpoenas have also energized public defenses of the Fed’s independence, a norm Wall Street and global policymakers view as a key guardrail for inflation expectations and the dollar’s credibility.
Jerome Powell and Trump’s looming Fed pick
Trump said he is leaning toward naming either former Fed governor Kevin Warsh or National Economic Council Director Kevin Hassett to replace Jerome Powell and signaled a decision could come within weeks. Powell’s chair term expires in May, though he can remain on the Fed’s Board of Governors until 2028 if he chooses.
The selection matters because the next chair will inherit a policy debate that has become more openly political: Trump has repeatedly pushed for sharper rate cuts and has argued a president “should have something to say” about Fed decisions. The White House’s pressure campaign is also playing out in court, with Trump’s attempted removal of Fed Governor Lisa Cook headed to the Supreme Court, according to Reuters.
How the Trump-Jerome Powell clash built over years
The confrontation did not start with the renovation probe. During Trump’s first term, he privately discussed firing Jerome Powell after rate increases rattled markets, Reuters reported in December 2018.
Powell’s position later hardened as administrations changed: President Joe Biden nominated Jerome Powell for a second term in 2021, Reuters reported, extending the tenure of a chair who had faced intense political criticism but retained bipartisan backing in the Senate.
And the question of removal resurfaced last summer, when Trump said he was not planning to fire Jerome Powell while leaving the door open, Reuters reported in July 2025.
Now, with the Justice Department probe underway and a nomination decision nearing, Trump is signaling he can live with Jerome Powell for the remainder of the chair’s term — while making clear he expects loyalty from elected Republicans as the Senate prepares for a confirmation fight that could redefine the Fed’s political guardrails.
