White House Urges Powell to Resign from Fed Board After Report on Management Failures

White House National Economic Council Director Kevin Hassett has called for former Federal Reserve Chair Jerome Powell to step down from the Fed's board of governors. The request follows a report from the Fed's inspector general, which uncovered significant management failures in a $2.4 billion headquarters renovation project in Washington. The report, released on September 30, 2026, found no criminal wrongdoing but highlighted severe mismanagement that nearly doubled the original cost estimates.

President Donald Trump also weighed in, posting on social media that Powell should be removed from the board. Powell has remained on the board after completing his term as chairman in May 2026, a departure from the usual practice of outgoing chairs resigning entirely. He cited potential threats of criminal investigations as the reason for staying in his post.

Hassett discussed the situation during an interview on Fox News' Sunday Morning Futures, stating, "I think that it's time for him to move on and to respect the independence of the Fed." He also addressed recent monetary policy shifts under Chairman Kevin Warsh, who voted to raise interest rates by a quarter percentage point to combat inflation. Hassett disagreed with the decision but acknowledged Warsh's intentions.

US Attorney General Todd Blanche announced that the Justice Department will not reopen a criminal probe into Powell based on current findings. However, the Federal Reserve plans to hire an independent auditor to review the construction expenditures. Blanche emphasized that prosecutors would investigate if the audit uncovers evidence of unlawful actions.