Hassett Calls for Powell to Step Down After Fed Renovation Scrutiny

Kevin Hassett, former chief economic advisor to President Donald Trump, has called on Jerome Powell to step down from the Federal Reserve's Board of Governors following a critical report on the management of two major renovation projects. Hassett, now heading the White House's National Economic Council, suggested during a Fox News interview that Powell should 'move on,' framing it as a respectful approach to the Fed's independence. The report, released by the Office of Inspector General on September 29, highlighted significant deficiencies in the handling of the 'Eccles' and '1951 Constitution Avenue' building renovations, though it found no evidence of criminal misconduct.

The budget for the projects ballooned from $921 million in February 2020 to $2.018 billion in the 2024 budget, with the Fed now approving a total of $2.46 billion. The Inspector General criticized the Fed for poor contract management and cost control failures, leading to excessive cost increases. The Fed accepted seven recommendations aimed at improving oversight.

Trump, who has long clashed with Powell over interest rate policies, renewed his demand for Powell's resignation. However, the Department of Justice dismissed the idea of reopening a criminal investigation, citing the Inspector General's findings. Federal Reserve Chair Kevin Warsh announced plans to hire an external reviewer to scrutinize the renovation costs and procedures further.

Powell, who stepped down as Fed Chair in May but remains on the Board until 2028, has emphasized his commitment to transparency regarding the investigations. Meanwhile, Hassett criticized the Fed's recent decision to raise interest rates by a quarter percentage point to 3.75%-4.00%, though he acknowledged respecting Warsh's leadership. Trump, however, pushed for lower rates, advocating for a reduction to 1% or less.