Hassett presses Powell to leave the Fed board as Justice Department closes its inquiry

Kevin Hassett, director of the National Economic Council and President Donald Trump’s chief economic adviser, called on former Federal Reserve chair Jerome Powell to move on from the Fed board^3,6. Hassett said it is time for Powell to leave and described his extended tenure as unprecedented^4,5. Fox Business reported that Hassett framed the departure as a way to preserve Fed independence⁴.

The legal pressure on Powell eased in the same week. The Justice Department said on Friday that its findings did not justify reopening a criminal investigation into Powell². Deputy Attorney General Todd Blanche told Bloomberg TV that the department will not reopen the related probe¹.

Why it matters to investors

The request concerns a seat, not a chairmanship. Powell is the former chair^3,5, so what is at issue is whether a past chair keeps serving out a governor’s term while the administration presses him to go⁴. Markets price central-bank independence partly through how secure board seats are from political pressure, which is the frame Hassett himself invoked⁴.

The timing compounds that. Hassett spoke while the Fed was weighing another rate increase², so the request arrived in the middle of a live policy decision rather than between meetings. Hassett also said he disagreed with the rate increase the Fed had already delivered⁵, putting the administration on the record against the committee’s direction.

There is also a sequencing point. The call to resign came after the Justice Department had closed the criminal matter rather than while it was open^1,2, so the argument being made in public is about tenure and precedent^4,5 rather than about any legal finding.

What to watch

Hassett’s remarks drew a line between the current chair and the former one. He referred to how Chairman Kevin Warsh voted with colleagues on the committee⁶, which is a different argument from the one about Powell’s seat. Whether the administration extends its criticism to the sitting chair is the question that matters most for policy expectations⁶.

On the legal track, the Justice Department has now declined twice to take the matter further^1,2. Watch whether that settles the issue or whether the renovation findings resurface in another forum^1,2, and watch whether Powell responds to the call to resign³.

Hassett’s own position on policy is part of the record now. He said he disagreed with the rate increase the committee delivered⁵ while simultaneously describing his request as a defence of Fed independence⁴. Those two statements are what markets will have to reconcile when the administration comments on the next decision².