Trump could potentially fire Powell over Fed renovations, Hassett says

• The mere threat of firing Powell caused a sell-off in markets earlier this year that sent interest rates soaring.
• Trump said as recently as Friday he won't fire Powell, but Hassett's comments appear to crack the door open again.

Catch up quick: The administration has ramped up pressure on the Fed over cost overruns for its headquarters renovation project, which Hassett said on ABC's "This Week" was $700 million over budget.

• On Thursday, Office of Management and Budget head Ross Vought sent Powell a letter demanding answers to a series of questions about those overruns and project changes, and whether they complied with the law.
• Fed watchers see the building issue as an administration effort to build a case to oust Powell for cause.

What they're saying: "I think whether the president decides to push down that road or not is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed," Hassett told ABC.

• Asked if Trump has the authority to fire Powell, Hassett said: "That's a thing that's being looked into, but certainly, if there's cause, he does."

The intrigue: Hassett is widely seen as a leading contender to replace Powell, whose term as Fed chair expires in May.

What to watch: Vought's July 10 letter gives Powell seven business days to respond, which takes him through the end of this week.

• That would potentially give Trump time to attempt action before the next Fed meeting, which starts July 29.