President Donald Trump's long campaign to oust former Federal Reserve Chair Jerome Powell has collapsed, and now the president is reportedly left picking through the wreckage.
The Fed's inspector general found Wednesday that the central bank's massive headquarters renovation, while poorly managed, didn't involve criminal violations or misconduct by Powell or his colleagues, undercutting the main pretext Trump had been building to try to remove him, Politico reported.
Powell is no longer Fed chair but remains a regular member of the Board of Governors, with his term running until January 2028.
Rather than offer any "sense of closure," Trump responded with a social media post saying he'd asked Attorney General Todd Blanche to "make a determination as to what to do" about the renovation's cost. A former senior Trump official told Politico the president is trying to "save face" after the report failed to hand him the ammunition he wanted.
One person close to the White House said Trump still wants Powell gone and might want to force the issue.
"Will he? I doubt it," the person told Politico. "He is being told the courts will not allow it."
That assessment tracks with Trump's attempt to fire Fed board member Lisa Cook, which the Supreme Court blocked, sending the administration back to the drawing board and raising doubts about whether a Powell removal would survive legal challenge. The bond market, already pushing long-term U.S. debt rates to more than two-decade highs, is another constituency unlikely to welcome the chaos of a forced ouster.
"There’s also another problem for Trump: Even if he were able to fire Powell — or the former Fed chief decided to leave — he could lose Congress in the meantime," Politico reported.
“If the Democrats win the Senate in November, he’s not going to get any nominee through,” explained Mark Spindel, chief investment officer at Potomac River Capital and co-author of a book on Fed independence.
