President Trump has been patient with Federal Reserve Chair Jerome Powell. He has said so himself multiple times.
However, as of Wednesday, that patience officially has a hard deadline — and the deadline is May 15.
In an interview, President Trump put Federal Reserve Chair Jerome Powell on notice: leave quietly when your chairman’s term ends next month, or get fired. No more waiting. No more holding back.
“I’ve held back firing him,” Trump said. “I’ve wanted to fire him, but I hate to be controversial, you know?” Then the bottom line: “Well then, I’ll have to fire him.”
This has been building for a long time. Trump has been pressing Powell for months to lower interest rates. He has called Powell ineffective and stated that the Federal Reserve is out of step with what the American economy needs. Every time, Powell has held the line and done nothing.
So now there’s a deadline. Powell’s term as Fed chairman ends May 15. Trump’s pick to replace him — former Federal Reserve Governor Kevin Warsh — has his confirmation hearing scheduled for next Tuesday, April 21. The plan was a clean handoff: Warsh comes in, Powell steps out, everyone moves on.
A federal judge has ruled that the DOJ criminal investigation into the Federal Reserve’s $2.5 billion headquarters renovation is a political setup. Judge James Boasberg found the government offered “no evidence whatsoever that Powell committed any crime other than displeasing the President” and wrote there was “abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign.”
Despite this ruling, DOJ prosecutors showed up at the Fed construction site on Tuesday. They are not backing down.
Trump has said of Powell: “He’s doing a bad job. He should be lowering interest rates.” Powell told reporters he would stay on the job, stating that “that is what the law calls for” and that “that’s what we’re going to do in this situation.” He also declared: “I have no intention of leaving the board until the investigation is well and truly over, with transparency and finality.”
Trump declined to halt the DOJ probe. “Don’t you think we have to find out what happened there?” he said.
The situation has become a knot. Sen. Thom Tillis of North Carolina — a Republican and key vote on the Senate Banking Committee — says he will not confirm Warsh as the new Fed chair until the DOJ investigation against Powell is resolved. So the investigation Trump is using to pressure Powell out is also blocking his replacement from getting in.
Trump has not backed down. He says Tillis will come around — suggesting the senator “doesn’t want the legacy of having an incompetent guy stay there for longer than is necessary.” If Tillis does not? Trump says he will fire Powell the moment his chair term ends and sort out the confirmation mess later.
The Supreme Court is separately reviewing Trump’s attempt to remove Fed board member Lisa Cook — a case that could ultimately define just how much authority a president has over the supposedly independent Federal Reserve.
As of Wednesday, things stand at this point: Powell is dug in. Trump has issued a deadline. The Senate is gridlocked. The courts are watching. And U.S. Attorney Jeanine Pirro is appealing.
May 15 is less than a month away. Something is going to have to give.