Hassett Says Powell Should Leave Fed Board as HQ Renovation Dispute Reignites
Summary
- Hassett publicly called for former Chair Jerome Powell to resign from the Federal Reserve Board of Governors.
- The Fed’s headquarters renovation was criticized for management problems after costs climbed to $2.4 billion, nearly double the original plan.
- The Fed said it plans to appoint an independent outside auditor to review the cost of the headquarters renovation again.
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Kevin Hassett, director of the White House National Economic Council and President Donald Trump’s top economic adviser, publicly called for former Federal Reserve Chair Jerome Powell to step down from the Fed’s Board of Governors.
Bloomberg reported on October 4 that Hassett made the remarks on Fox News’ “Sunday Morning Futures.” Asked whether Powell should resign his board seat, Hassett replied, “I think it’s time for him to go and respect the independence of the Federal Reserve.”
The comments came after an internal watchdog review of the Fed’s headquarters renovation project. In a report released on September 30, the Fed’s inspector general said it found no evidence of criminal conduct or administrative misconduct related to the Washington headquarters renovation. The report did, however, identify management problems as the project’s cost ballooned to $2.4 billion, nearly double the original plan.
Trump also argued on social media after the report’s release that Powell should resign from the Fed board. Powell has remained a Fed governor since his term as chair ended in May.
The Justice Department, however, has said it will not reopen a criminal investigation into Powell based on the report. Deputy Attorney General Todd Blanche said in an October 2 interview that the inspector general’s findings alone would not be enough to restart the investigation.
The Fed plans to appoint an independent outside auditor to review the headquarters renovation costs again. Blanche said the Justice Department could investigate if that audit later uncovers evidence supporting criminal conduct.
A separate disagreement between the Trump administration and the Fed over interest-rate policy is also continuing. Under Chair Kevin Warsh, the Fed raised its benchmark interest rate by 0.25 percentage point last month in response to persistent inflation.
Hassett said he disagreed with Warsh’s decision to raise rates, but respected that the move was made for what he saw as the right reasons.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.