Trump Issues Ultimatum to Jerome Powell Amid Standoff Over Federal Reserve Independence

U.S. President Donald Trump threatened on April 15, 2026, to fire Federal Reserve Chair Jerome Powell from his seat on the Board of Governors if Powell does not vacate the position entirely when his term as chair expires on May 15, 2026. Trump made the threat in an interview with Fox Business, telling host Maria Bartiromo that he had restrained himself from acting sooner out of a desire to avoid controversy. Powell's term as chair ends on May 15, but his term as a governor on the Fed's seven-member board runs until early 2028, meaning he retains the legal right to remain at the institution in a different capacity. Powell has indicated he intends to stay on as interim chair if his nominated successor, Kevin Warsh, is not confirmed by the Senate before the deadline. Trump's remarks represent an escalation of a months-long confrontation with the Fed chief, rooted primarily in Powell's refusal to cut interest rates despite repeated presidential pressure.

Criminal probe tangles Warsh's path to confirmation The confirmation of Kevin Warsh as the next Fed chair has become entangled in a separate criminal investigation targeting Powell, complicating what would normally be a routine Senate process. U.S. Attorney for the District of Columbia Jeanine Pirro is leading an investigation into whether Powell made inaccurate statements to Congress in connection with the renovation of the Federal Reserve's Washington headquarters, a project Trump has described as costing approximately 2.5 (billion USD) — Fed headquarters renovation cost under scrutiny. Trump has insisted the investigation must continue, framing it as a matter of demonstrating Powell's incompetence rather than corruption alone.

„What they did there is probably corruption, but mostly it is incompetence, and we must show this incompetence.” — Donald Trump via Fox Business

Republican Senator Thom Tillis of North Carolina, a member of the Senate Banking Committee overseeing Warsh's nomination, has threatened to block the confirmation unless the investigation into Powell is dropped. Tillis's position has created a direct conflict within the Republican Party between those who want Warsh confirmed quickly and those, including Trump and Pirro, who want the probe to proceed. The Senate Banking Committee has scheduled Warsh's confirmation hearing for April 21, 2026, according to Politico.

GOP leaders split over whether probe should continue Senior Republican figures have publicly called for the Justice Department to close the investigation, putting them at odds with Trump's stated position. Senate Majority Leader John Thune of South Dakota said on April 15 that ending the probe was in the best interest of all parties.

„I think ending the investigation is in the best interest of everyone.” — John Thune via BBC

Senator Mike Rounds of South Dakota, also a member of the banking committee, told reporters at the Capitol that the investigation does not serve the goal of helping the president install his preferred Fed chair. Trump, however, pushed back against calls to drop the case, telling Fox Business he needed to find out what happened at the Fed building. The president also expressed hope that Tillis would ultimately relent, saying Tillis "is an American... he knows what to do," while stopping short of applying direct pressure on the senator to abandon his position. The standoff illustrates the degree to which the criminal investigation has become a liability for the administration's own legislative agenda on monetary policy.

Bessent optimistic despite the political deadlock Treasury Secretary Scott Bessent struck a conciliatory tone at a White House press conference on April 16, expressing confidence that Warsh would be confirmed before the May 15 deadline despite the political complications. Bessent noted that Tillis had previously described Warsh as an excellent candidate for the chairmanship, suggesting the senator's opposition was conditional rather than absolute.

„I am sure Senator Tillis wants to do what is best for the Federal Reserve for the American people. He has publicly said that Kevin Warsh is an excellent candidate for the chairmanship, so let's proceed with the hearings and see how things go.” — Scott Bessent via BBC

Warsh, who served as a Fed governor from 2006 to 2011 and acted as the central bank's primary liaison to Wall Street during the 2008 financial crisis, is considered a Trump ally and a proponent of a harder line on monetary policy. Powell, for his part, has cited legal precedent in defending his right to remain at the institution beyond his chairmanship, noting that interim leadership arrangements have been used on multiple occasions in the Fed's history. The broader stakes of the standoff extend beyond the chair position: Trump has appointed only three of the seven current Fed governors, and the administration has been seeking to expand its influence over the board, including through a separate legal case before the U.S. Supreme Court involving the attempted removal of Governor Lisa Cook.

The Federal Reserve has operated as an independent institution since its founding in 1913, with its chair serving a four-year term renewable by the president. Jerome Powell was first nominated to the chairmanship by Trump in 2017 and was later renominated by President Joe Biden. The tension between the Trump administration and Powell over interest rate policy has been a recurring feature of Trump's second term, with Trump repeatedly labeling Powell an "idiot" and accusing him of mismanaging the central bank. The renovation of the Fed's Washington headquarters became a flashpoint after the project's costs escalated to approximately 2.5 billion dollars, a figure Trump has cited as evidence of institutional mismanagement.

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