White House economic adviser Kevin Hassett said Jerome Powell should leave the Federal Reserve's board of governors after an internal watchdog report cleared the central bank's headquarters renovation of criminal wrongdoing. President Trump followed with a social media post demanding Powell resign, while the Justice Department said it would not reopen a criminal probe based on the report.
Kevin Hassett, head of the White House National Economic Council, said Powell should move on from the Fed's board, speaking on Fox News days after an internal review of the central bank's renovation project found no criminal conduct. Trump then posted that Powell should be forced out, and the Justice Department confirmed it would not reopen a criminal case against him.
Hassett says it's time for Powell to go
Hassett made the comments on Fox News' Sunday Morning Futures when asked whether former Fed Chair Jerome Powell should resign. Hassett said on air: "it's time for him to move on and to respect the independence of the Fed". Powell left the chair role in May but remained on the Fed's board of governors, breaking with the precedent of past chairs departing the central bank once their terms end.
Renovation probe found no criminal wrongdoing
The Fed's internal watchdog said in a Sept. 30 report that it found no evidence of criminal wrongdoing and no administrative misconduct tied to the $2.4 billion renovation project in Washington. The report cited management deficiencies that helped almost double the project's original cost. Trump responded with a social media post saying Powell, whom he had pressured to lower borrowing costs as Fed chair, should be forced to resign from the board.
Justice Department holds off, for now
Attorney General Todd Blanche, whom Trump asked to review the findings, said in an interview on Friday that the Justice Department would not reopen a criminal investigation of Powell based on the report. The Fed has said it will engage an independent auditor to scrutinize the building costs, and Blanche said the department could still investigate if that review turns up evidence of criminal misconduct.
Powell has said threats of criminal investigations into him and the Fed left him with no option but to stay on the board, a stance Trump and other administration officials have condemned. Last month, policymakers under Fed Chairman Kevin Warsh voted unanimously to raise interest rates by a quarter percentage point amid stubborn inflation. Hassett said he disagreed with that decision but respected that Warsh made it for the right reasons.
Trump has said Warsh, whom he picked to succeed Powell, should make his own calls on rates. He told Time magazine he probably would have voted against the board had he been in Warsh's position.
Source: Investing.com
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