During an appearance on Bloomberg Television, Scott Bessent, the 79th Secretary of the Department of the Treasury, stated that the Trump administration was formally beginning the search for a replacement for Federal Reserve Chairman Jerome Powell.
“There’s a formal process that’s already starting … There are a lot of good candidates inside and outside the Federal Reserve,” Bessent told Bloomberg’s Jonathan Ferro.
Fed Chair Powell has been under intense scrutiny from the Trump administration to lower interest rates and has yet to do so in four consecutive meetings of the Federal Open Market Committee (FOMC).
And during a cabinet meeting at the White House last week, President Donald Trump pushed for an investigation into Powell over a proposed $2.5 billion renovation to the Federal Reserve headquarters. According to the New York Post, the projected renovations by the Fed have risen by 30% from its original estimate of $1.9 billion.
“President Trump said numerous times he’s not going to fire Jay Powell … he’s working the refs,” said Bessent during the Bloomberg appearance. “And I’ve said before, I’m a basketball fan, there are two schools of working the refs—there’s the Bobby Knight school, and there’s the Dean Smith School. President Trump seems to prefer the Bobby Knight school. And I’ll tell you, I went back over the weekend and looked, and Bobby Knight won three NCAA championships. My hero Dean Smith only won two.”
Basketball analogies aside, Bessent has emerged as a possible candidate for the role of Fed Reserve Chair, alongside National Economic Council Director Kevin Hassett. There is no law preventing the Treasury Department Secretary from also serving as Chair of the Fed.
“As President Trump said, he’s not looking to fire Chair Powell, and as I’ve said, I’m not going to comment on future policy or future mistakes the Fed will make,” added Bessent. “I’ll only comment on past mistakes, and they’ve had some big forecasting errors, and this may be one.”
The New York Times reported that President Trump has gone so far as to draft a letter for firing Powell. Trump nominated Powell for the chair in November 2018 to succeed Janet Yellen, who became Treasury Secretary under President Joe Biden. The Senate confirmed Powell the following February, and the Fed, under Powell, has held interest rates steady after lowering them in late 2024.
In addition to President Trump, Fed Chair Powell has faced repeated backlash from William J. Pulte, Chair of the Federal Housing Finance Agency (FHFA), and Fannie Mae and Freddie Mac, who called on Congress to open an investigation into Powell.
“I am asking Congress to investigate Chairman Jerome Powell, his political bias, and deceptive Senate testimony, which is enough to be removed ‘for cause,’” said FHFA Chair Pulte in a social media post on X. “Jerome Powell’s $2.5B Building Renovation Scandal stinks to high heaven, and he lied when asked about the specifics before Congress. This is nothing short of malfeasance and is worthy of ‘for cause.’”
Office of Management and Budget (OMB) Director Russell Vought has also written a letter to Powell over “mismanagement” of the Fed.
“Chairman Jerome Powell has grossly mismanaged the Fed,” said Vought in a social media post accompanying his letter. “While continuing to run a deficit since FY23 (the first time in the Fed’s history), the Fed is way over budget on the renovation of its headquarters. Now up to $2.5 billion, roughly $700 million over its initial cost. These renovations include terrace rooftop gardens, water features, VIP elevators, and premium marble. The cost per square foot is $1,923—double the cost for renovating an ordinary historic federal building. The Palace of Versailles would have cost $3 billion in today’s dollars!”
Earlier this week, Rep. Abraham Hamadeh urged Powell to step down in light of his “gross mismanagement” of the Federal Reserve’s headquarters renovation project, apparent lack of candor, failure to accurately assess the effects of tariffs, and refusal to lower interest rates for the good of the nation in a timely manner.
“My call for Chairman Powell’s resignation does not come lightly nor without good cause,” said Rep. Hamadeh. “Considering the recent revelations by Office of Management and Budget Director Russell Vought about Chairman Powell’s gross mismanagement of the Federal Reserve’s headquarters renovation project, and his apparent lack of candor before the Senate Banking Committee, neither does my call come too soon.”
Hamadeh noted in his letter to Powell that the “ostentatious” $2.5 billion overhaul of the Federal Reserve’s campus is $700 million over budget. Rep. Hamadeh is concerned that Powell’s failures have caused homeownership to be cost prohibitive for too many young tax-paying families, while the burden for the Federal Reserve’s campus renovations fall on those same taxpayers.
Click here for more on Treasury Secretary Bessent’s spot on Bloomberg News.
