Hassett Calls on Powell to Resign Amid Fed Independence Concerns

White House economic adviser Kevin Hassett has called for former Federal Reserve Chair Jerome Powell to step down from the Fed Board, arguing that his continued presence undermines the central bank's independence. Speaking on Fox News' Sunday Morning Futures, Hassett described Powell's decision to remain on the board after his chairmanship ended in May as "completely unprecedented." He compared the situation to a corporation where an outgoing CEO stays in the office next to his successor, creating an unusual dynamic.

The remarks come after an internal watchdog report criticized the Fed's management of a headquarters renovation project, where costs ballooned from $921 million in 2020 to $2.018 billion in 2024. The Office of Inspector General found no evidence of criminal wrongdoing but noted failures in project governance. President Donald Trump has seized on the report, demanding Powell's resignation, though Attorney General Todd Blanche said the findings do not justify a criminal investigation.

Powell has defended his decision to stay, citing threats of criminal investigations into him and the Fed. His continued presence means he retains a vote on the Federal Open Market Committee, which recently raised interest rates by a quarter percentage point. Hassett disagreed with the rate hike but acknowledged Warsh's independence in making the decision. The dispute reflects a broader confrontation between Trump and Powell over interest rate policy and Fed independence.

The renovation controversy has become a flashpoint in the ongoing tensions between the Trump administration and the Fed. Powell's extended tenure is seen by some as an obstacle to restoring what the administration describes as a properly functioning, independent central bank.