Hassett calls on Powell to leave the Federal Reserve board

Kevin Hassett, director of the National Economic Council and the president’s chief economic adviser, called on former Federal Reserve chair Jerome Powell to leave the Fed board^3,7. “I think that it’s time for him to move on and to respect the independence of the Fed,” Hassett said^4,6,8. He spoke on Sunday Morning Futures, where he also discussed inflation¹.

The call follows the release of an inspector general report into renovations at the Federal Reserve carried out under Powell^2,11. Trump responded by saying Powell “should be forced to resign from the Board”². Fox Business framed Hassett’s position as arguing that Powell should move on in order to preserve Fed independence¹.

Why it matters to investors

The legal track and the political track have now separated^5,10. Attorney General Todd Blanche said on Friday that the Justice Department would not reopen a criminal investigation based on the renovation findings⁵. “We’re not reopening a criminal investigation into him,” Blanche said, referring to Powell and the central bank’s costly headquarters renovation¹⁰. The decision was reported after the release of the inspector general report rather than before it¹¹.

That leaves pressure on Powell’s board seat as a purely political matter, pursued from the White House rather than through prosecutors^5,10. For markets the question is not the renovation but whether a governor can be pushed off the board by public pressure, and what that implies for the next official who disagrees with the administration^3,7.

What to watch

Powell has already set out his own condition⁹. At his final press conference as chair in April, he said he intended to stay on the Fed’s board until the investigation was “well and truly over”⁹. The Justice Department’s decision not to reopen the case arguably satisfies that test, which is why the demands for his departure arrived immediately afterwards^5,9.

Watch whether Powell responds publicly, whether the administration escalates beyond statements, and whether the Fed’s internal watchdog findings are used again^6,9. Each step is a readable marker of how much room the central bank has to set policy independently of the White House^1,8.

Hassett’s remarks were carried by Bloomberg and Bloomberg Law under the same formulation, that Powell should move on from the Fed board^3,7. Investing.com and Seeking Alpha both tied the call directly to the renovation report rather than to monetary policy^2,6. That distinction is worth holding on to: nothing in the public case against Powell concerns a rate decision^2,11.