President Donald Trump said that he will fire Federal Reserve Chair Jerome Powell next month if Powell does not step down when his term as chair ends on May 15. The threat comes amid an ongoing Department of Justice criminal investigation into Powell's handling of the Fed’s $2.5 billion headquarters renovation, which has been a source of tension between the White House and the central bank.

In an interview with Fox Business’ Maria Bartiromo, President Trump stated, “Then I’ll have to fire him,” in response to the possibility that Powell might remain at the Fed if his successor is not confirmed in time. Trump reaffirmed his administration’s commitment to continue the criminal probe into the renovation project, calling for accountability over what he described as “almost 80%” cost overruns. “Whether it’s incompetence, corruption, or both, I think you have to find out,” Trump said.

The president’s nominee to replace Powell is former Fed governor Kevin Warsh. However, Warsh’s confirmation by the Senate has been delayed, largely due to the ongoing investigation. North Carolina Senator Thom Tillis, a key member of the committee that approves Fed nominees, has said he will not support Warsh’s confirmation until the probe concludes.

Powell has stated he will not step down from the Fed until the investigation is “well and truly over with transparency and finality.” At a press briefing in March, Powell said he would stay on as chair “pro tem” if Warsh is not confirmed by May 15, which is allowed under Fed regulations. “That’s what the law calls for. That’s what we’ve done on several occasions,” Powell explained.

The probe into the renovation was launched after allegations that Powell misled Congress about the project’s costs. Some Senate Republicans and a federal judge have questioned whether the investigation is being used to pressure the Fed to lower interest rates. Last month, a federal judge blocked Justice Department subpoenas related to the case, a decision prosecutors plan to appeal.

Under the Federal Reserve Act, the president can only remove Fed officials “for cause.” Legal experts say it remains unclear whether Powell’s actions meet that threshold, and Powell has indicated he would challenge any attempt to remove him.

The Senate Banking Committee’s hearing for Warsh is scheduled for April 21, but with the investigation ongoing and confirmation uncertain, the leadership of the central bank remains in limbo. Trump’s renewed threat to fire Powell has escalated concerns about the independence of the Federal Reserve and the growing conflict between the White House and the central bank.

Simon Conway