Fed watchdog clears Powell as Trump demands he leave the board

The Federal Reserve’s inspector general cleared former chair Jerome Powell in the investigation into the central bank’s headquarters renovation^6,8. The watchdog found deficiencies but no Fed misconduct in the Powell-era project⁷. Its report did, however, highlight extensive problems with project oversight⁷. Newser summarised the finding as mistakes but no crimes⁹. Le Monde reported the same conclusion, that the watchdog had cleared the former US Fed chief in the renovation probe⁸. Scotsman Guide quoted the report’s own language, that it outlines numerous problems while clearing the former chair⁶.

The Wall Street Journal noted that the report had been seen as a potential resolution to a political and legal drama that prompted Powell to stay at the Fed after his chairmanship ended¹⁶. The inquiry followed Powell’s testimony about the renovation before a Senate committee⁹. Powell had given testimony regarding the building renovations¹.

Trump’s response

President Donald Trump called on Powell to resign from the central bank’s Board of Governors³. “This is Jerome Powell’s fault, and he should be forced to resign, IMMEDIATELY!” Trump wrote^1,2. “At a minimum, ‘Too Late’ Powell should be forced to resign from the Board,” he added⁴. Trump made the demand in a TruthSocial post and asked the attorney general to review the report¹⁰.

He also renewed his call for an investigation into Powell and for the former chairman’s removal from the board⁵. France 24 reported that Trump is separately trying to sack Fed Governor Lisa Cook over alleged wrongdoing in an unrelated matter¹¹. Cook denies the mortgage fraud allegations against her, and the Supreme Court sided with her in June¹².

What to watch

Politico argued that Powell is likely to stick around at the Fed². CNBC reported that Trump could seek to remove Powell, Cook and Governor Michael Barr, and that removing them may be hard¹³. An outside investigation into the Fed’s handling of the renovation is also under way¹³. One newspaper carried the two findings side by side in a single headline, no Fed misconduct in the renovation and a presidential call for Powell’s resignation⁴.

Current Fed chairman Kevin Warsh, who took office in May, has acted on the building itself⁹. Warsh announced that the US General Services Administration will lead the headquarters renovations¹⁴. Fox Business reported that Warsh handed GSA the management of the project, which has run to more than $2 billion, after the inspector general found significant cost overruns¹⁵.