Is Powell at risk of being dismissed again? Trump's advisor Hassett: He may face removal due to the Federal Reserve headquarters renovation project

According to the Zhitong Finance APP, White House economic advisor Kevin Hassett stated last Sunday that Federal Reserve Chairman Jerome Powell's position may be at risk, depending on his response to questions related to the $2.5 billion renovation project at the Federal Reserve headquarters.

"This is the most expensive construction project in Washington's history," Hassett said in a television interview, "of the total budget of $2.5 billion, the overspend amounts to $700 million. For example, the overspend on this Federal Reserve project is almost equivalent to the scale of the second-largest building renovation project in U.S. history—the renovation of the Federal Bureau of Investigation (FBI) headquarters."

He added, "The Federal Reserve has many questions to explain." When asked if this could be grounds for Powell's dismissal, Hassett responded, "This matter is under investigation, but clearly, if there is reasonable basis, he could indeed be dismissed."

These remarks come as the Trump administration's pressure on Powell is escalating. Powell was initially appointed as Federal Reserve Chairman during Trump's first term. Recently, White House Office of Management and Budget Director Russell Vought accused Powell in a letter, claiming he either misled Congress or violated federal permitting regulations related to the high-cost renovation project of the historic building located on Constitution Avenue.

According to media reports, several White House advisors, including Deputy Chief of Staff James Blair, have entered the National Capital Planning Commission (the agency responsible for approving major federal projects in Washington, D.C.). Both Blair and Vought stated that they are investigating whether Powell's testimony before Congress contained inaccuracies or omissions.

Controversy Surrounding Interest Rates

Prior to this, Trump had repeatedly criticized Powell's monetary policy, particularly unhappy with the Federal Reserve's refusal to cut interest rates to alleviate the debt repayment pressure on the federal government. Recently, Trump stated that Powell "has done a terrible job," "costing the country a lot of money."

Although the Federal Reserve defended the headquarters renovation project, citing unforeseen issues such as asbestos contamination and soil pollution, critics seized on the out-of-control project costs, arguing that this move looks very bad against the backdrop of public calls for fiscal tightening. The Federal Reserve stated that it has complied with all necessary regulatory requirements and that Powell's testimony before Congress is accurate.

However, legal experts warn that attempting to dismiss Powell could undermine the long-established principle of Federal Reserve independence. Although the Supreme Court has limited the president's power to dismiss central bank officials due to policy disagreements, theoretically, if there is "reasonable cause," Powell could be dismissed. This ambiguous legal standard may now be tested by the Trump administration due to the controversy surrounding the renovation project