Trump Renews Call for Fed Chair Powell's Resignation Following FHFA Investigation Request

Former U.S. President Donald Trump has intensified his demand for Federal Reserve Chair Jerome Powell to step down, following allegations of providing false testimony to Congress. The longstanding tension between the two stems from disagreements over interest rate reductions, with Powell's recent congressional appearance further escalating the conflict. On Thursday, Trump took to Truth Social, stating Powell "should resign immediately" and asserting that Congress should investigate the Fed Chair.

The dispute deepened when Federal Housing Finance Agency (FHFA) Director Bill Plute accused Powell of "political bias" and "misleading testimony" regarding renovations at the Federal Reserve's Washington headquarters, urging congressional scrutiny. Trump quickly echoed these calls for resignation.

This marks an extension of Trump's previous criticism, having labeled Powell "a stubborn mule and a stupid person" last month for resisting rate cuts. The former president contends that Powell's monetary policy stance hinders economic growth, dismissing inflation concerns as exaggerated. While lower interest rates typically stimulate economic activity, economists caution they may trigger inflationary pressures—a risk central banks aim to mitigate. Some analysts specifically warn that Trump's proposed tariffs could catalyze inflation.

At the European Central Bank Forum in Portugal, Powell indicated the Fed is maintaining current rates while assessing the impact of Trump's trade policies. Legally, a president can only remove a Fed chair for misconduct, not policy disagreements—a principle reinforced by recent Supreme Court rulings limiting presidential authority over independent agencies. Nevertheless, Trump claims to have multiple candidates prepared to replace Powell.

Separately, Powell has defended the Fed's headquarters renovation plans against media reports of ballooning costs and luxury features, calling such allegations "misleading and inaccurate." While congressional committees have yet to formally address the matter, House Judiciary Chair Jim Jordan signaled potential future review.