Here's how Trump's feud with Fed chair Jerome Powell escalated
Add Axios as your preferred source to
see more of our stories on Google.
Fed Chair Jerome Powell testifies before the Senate Banking Committee on June 25, 2025 ,in Washington, D.C. Photo: Kent Nishimura/Getty Images
The Federal Reserve's $2.5 billion plan to renovate its D.C. headquarters is the latest flashpoint in President Trump's ongoing feud with chair Jerome Powell over interest rates.
Why it matters: Trump previously said he wouldn't attempt to fire Powell until the chair's term ends next year, but investigating the renovation could give Trump ammunition to remove an obstacle to his economic agenda.
Catch up quick: Office of Management and Budget Director Russell Vought posted a letter on X on Thursday in which he claimed Powell has "grossly mismanaged the Fed" and had misled Congress about the cost of the project.
- The Federal Reserve posted a Frequently Asked Questions page responding to some of Vought's criticism on Friday, including details on why the project's costs increased.
- Vought told CNBC on Friday that the costs of the central bank's renovations should be investigated. Axios scooped Monday that Powell has asked the bank's inspector general to review its redesign.
Why is Trump mad at Powell?
Friction point: Trump has repeatedly blasted Powell over the Fed's decision not to lower interest rates as much as the president desires.
- Trump has taken to social media to call Powell names and urge him to lower interest rates.
- However, even if Trump were to successfully remove Powell, that doesn't guarantee the seven-member board would then vote to lower interest rates.
Can the president remove the federal reserve chair?
Reality check: The Fed is an independent institution that has protections from political interference so that it can make monetary policy decisions without outside pressure.
- The Supreme Court ruled in 1935 that commissioners at independent agencies like the Fed can't be fired at will.
State of play: The Supreme Court did grant an emergency request to hear a case challenging those protections for independent agencies earlier this year, where the justices concluded that there are narrow exceptions where the Trump administration can fire some officials.
- However, the court's order includes a carveout for the Fed, which should protect the agency from firings, at least temporarily.
What could happen next?
The Trump administration and its allies have already doubled down on their push to oust Powell.
- Vice President JD Vance wrote that the Fed has been "totally asleep at the wheel," in a post on X on Sunday, echoing Trump's criticism. "As President Trump says, they're TOO LATE—both in fighting inflation during Biden and in lowering rates now."
- Kevin Warsh, a former governor of the Fed board who is considered a contender to replace Powell, said that the Fed needs a "regime change" on Fox News Sunday.
- White House economic adviser Kevin Hassett said on ABC's "This Week" that Trump's decision to fire Powell would "depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed."
What to watch: Vought's letter asks Powell to respond to his questions within seven business days.
Go deeper: Scoop: Powell asks Fed IG to review renovation costs amid Trump pressure
