Trump says he won’t fire Powell despite DOJ grand jury subpoenas

President Donald Trump said he does not currently plan to fire Federal Reserve Chair Jerome Powell, even as the Justice Department has opened a criminal probe into the Fed’s multibillion-dollar headquarters renovation that has put Powell under intense political pressure. The comment shifts the immediate dynamic in a confrontation that has unsettled markets and intensified debate over the boundary between politics and monetary policy.

Asked whether he intended to remove Powell, the president said, "I don't have any plan to do that," adding it was "too early" to say whether the investigation would provide grounds for dismissal and describing the administration as being "in a little bit of a holding pattern with him." Trump also identified potential successors, calling former White House economic adviser Kevin Hassett and former Fed governor Kevin Warsh "very good" prospects and saying he would be "announcing something over the next couple of weeks." When pressed about Republican criticism that the investigation could be seen as an effort to influence interest-rate decisions, he said, "I don't care... They should be loyal. That's what I say."

Federal prosecutors have served grand jury subpoenas seeking information tied to Powell’s testimony to Congress about the renovation of the Federal Reserve’s Washington headquarters, and the matter is being pursued as a criminal inquiry. The renovation has been described as a multibillion-dollar project with costs reported around $2.5 billion and significant overruns. There have been no reported indictments or criminal charges tied to Powell; prosecutors have sought testimony and documents through the subpoenas.

Powell has publicly framed the subpoenas as part of a broader pressure campaign aimed at influencing monetary policy. In a statement he said the inquiry "is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions - or whether instead monetary policy will be directed by political pressure or intimidation." The chair is due to step down from his role as chair in May, though his term as a member of the Board of Governors runs through January 2028.

Federal law constrains presidential power to remove Fed governors: they can be dismissed only for cause, not for policy disagreements. That legal protection is central to the Fed’s independence and shapes the practical options available to the White House as it weighs personnel moves. The probe has added new uncertainty to the administration’s timetable for nominations to the central bank and prompted legislative pushback; one senator on the Senate Banking Committee has said he would block Fed nominations until the investigation is resolved.

The episode raises immediate institutional and market risks. Investors and policymakers watch for any sign that criminal investigations or political threats could alter the Fed’s policy calculus at a time when inflation and growth data are producing mixed signals. Some market observers have argued the pressure might paradoxically reinforce Powell’s institutional role or prompt him to remain on the board after his chairmanship ends.

Prosecutors have not publicly detailed who authorized the subpoenas, and officials have not disclosed whether grand jury testimony has been completed. The coming weeks will test how the White House balances political signaling with legal constraints, and whether a formal nomination emerges as Trump indicated. For the Fed, the clash underscores the fragility of norms that separate monetary policy from immediate political influence.