Trump Demands Powell’s Head After FHFA Launches Probe—Fed Chair in Hot Seat

Another day, another political firestorm in the swamp. Former President Trump just threw gasoline on the Fed’s credibility crisis—calling for Jerome Powell’s resignation after the Federal Housing Finance Agency (FHFA) opened an investigation into… something. Because nothing says 'stable monetary policy' like a public execution of your central banker.

The Fed’s already walking a tightrope with inflation still above target and markets jittery. Now add a political circus to the mix. Powell’s term isn’t up until 2026, but since when has that stopped a good old-fashioned witch hunt?

Meanwhile, Wall Street shrugs—used to this kabuki theater by now. After all, what’s a little political pressure when you’ve got the money printer on standby? Just another Tuesday in the fiat casino.

Trump and Powell have been disagreeing on interest rate cuts

In an X post on Wednesday, Bill Plute, the director of the Federal Housing Finance Agency, accused Powell of “political bias” and “deceptive testimony” on the renovations at the Federal Reserve headquarters in Washington, DC, asking Congress to investigate him. After which, TRUMP demanded that the Fed Chair step down. 

Just last month, Trump said he WOULD like to replace Powell with someone more inclined to lower interest rates.

He told reporters, “I’m going to put somebody that wants to cut rates. There are a lot of them out there.” Even then, he asked the Fed chair to resign and described him as “a stubborn mule and a stupid person” for disapproving of rate cuts.

Additionally, he argued that Powell’s stance only stands in the way of economic growth, and critics are overstating their inflation concerns.

Typically, lower interest rates tend to boost economic growth. Though they may sometimes lead to an inflation rise, something central banks try to avoid. Some experts have warned, however, that inflation is bound to rise with Trump’s tariffs. 

On Tuesday, Powell, at the European Central Bank Forum in Portugal, said the Fed is holding off on rate cuts while it evaluates the impact of Trump’s tariffs. He claimed they were taking their time to examine the situation.

By law, the president can only dismiss the Fed chair “for cause,” broadly seen as applying to misconduct rather than disagreements over monetary policy. 

The Supreme Court even recently ruled against Trump’s push to fire officials at independent federal agencies, a MOVE most believe the President advocated to target Powell. 

Despite the ruling, Trump still plans to replace Powell, having said he has about two to three choices who could take over from him. He recently wrote a letter asking Powell again to lower the benchmark interest rate—currently at 4.25% to 4.5%—by “a lot.”

Powell defends Fed HQ renovation as lawmakers signal review

According to media reports, the Fed’s headquarters project has incurred escalating costs and included several luxury features. In the Senate hearing last week, however, Powell pushed back on those claims, describing the reports as “misleading and inaccurate in many, many respects.”

He claimed that the “inflammatory” details reported by the media were either not part of the current plan or simply incorrect. Nonetheless, he said they are open to discussing the project’s expenses, adding that their renovation plans have changed over time.

The House Financial Services Committee Chair, French Hill, and the Fed spokesperson have not spoken on the matter. However, House Judiciary Committee Chair Jim Jordan noted that while they have yet to address the matter directly, they intend to review it.

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