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President Donald Trump has denied reports that he plans to fire Federal Reserve Chair Jerome Powell.
It came hours after reportedly telling a room full of Republicans that he planned to do so, and after a report by the The New York Times claimed he’d drafted a letter to Powell.
“No, we’re not planning on doing it. I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud,” he said told reporters at the White House on Wednesday during a meeting with Bahrain’s prime minister.
Trump added: “We get to make a change in the next eight months or so.”
Trump also said that Powell does a “terrible job” and “cost us a lot of money, but we fight through it.”
Powell’s reluctance to cut interest rates “does hurt people wanting to get a mortgage, people wanting to buy a house,” he added.
The president has been frustrated with Powell for not cutting interest rates. Currently, it stands at a range of 4.25% to 4.5%, but Trump wants it cut by up to 3 percentage points—saying it will save the U.S. $1 trillion in interest. He’s suggested for years ousting the Fed chair, but the president does not have the power to fire him over monetary policy.
Now, the tipping point might be how the central bank spent too much money on renovations of two historic office buildings. The Wall Street Journal reports they’re “targeting a makeover of the Fed’s historic building and an adjacent vacant property the Fed acquired seven years ago.”
The most recent renovations started three years ago, and the building’s remodel has run over budget because of construction roadblocks, including excess asbestos and contaminated soil.
Last week, the White House criticized how the Fed is being run after the director of the Office of Management and Budget, Russell Vought, sent Powell a letter saying he was “extremely troubled” by the cost overruns in the $2.5 billion renovation, Reuters reports.
Powell replied by asking the U.S. central bank’s inspector general to review the project.
Congressional hearing
Just last month, Powell was grilled during a congressional hearing on June 24 about the housing market.
The chair appeared before the House Financial Services Committee to present the Fed’s monetary policy report. During that time, Powell was grilled by Democrats and Republicans over the central bank’s decision to hold rates steady since December 2024.
Rep. Rashida Tlaib (D-Michigan) argued the Fed’s current policy rate was holding back much-needed residential construction.
“We’re talking about a housing crisis that is getting worse right now,” she said. “I come from a community right now that I believe is now being impacted by the current framework that you’re putting together, that I do feel like it’s going to be long-term effects on the housing crisis, and you’re ignoring it.”
“No, we’re not,” Powell responded coolly. “Actually, we think the very best thing we can do is to fully restore price stability at the aggregate level. That will be the best thing for homeowners and for homebuilders, and for everybody else, in the long run.”
During the hearing, Powell continued to defend the current rate as appropriate for the current circumstances. The chair said the Fed is “laser-focused” on its dual mandate of preventing runaway inflation and fostering a strong labor market.
Realtor.com® senior economist Jake Krimmel says that Powell’s remarks in the hearing suggest that he is still in “wait-and-see” territory, but that he has not ruled out a July cut entirely.
The Federal Reserve is set to meet again on July 29-20. While the FOMC is not expected to cut rates during that meeting, it will be closely watched to see if any decision is made stemming from the mounting pressure from the president and lawmakers.