How Trump could use a building renovation to oust Fed Chair Powell

WASHINGTON (AP) — President Donald Trump may have found a way to achieve his goal of removing Federal Reserve Chair Jerome Powell: by accusing him of mismanaging the U.S. central bank’s $2.5 billion building renovation project.

The push comes after a monthslong campaign by Trump to try to rid himself of the politically independent central banker, who has resisted the Republican president's calls to slash interest rates out of concerns about the administration's tariffs sparking higher levels of inflation.

The Supreme Court recently signaled that Donald Trump can’t fire Powell simply because the president disagrees with him on interest rates. But legally he could do so “for cause,” such as misconduct or dereliction of duty.

Trump has seized on that provision, indicating that Powell’s handling of an extensive renovation project on two Fed buildings in Washington could be grounds to take the unprecedented and possibly legally dubious step of firing him.

The project has been underway for years, going back to Trump’s first term. But it only recently caught the White House’s attention.

Last week, when asked if he thought the building renovation was a “firing offense,” Trump said, “I think it is.” But he later added that it was “highly unlikely” that he would ultimately remove Powell before his term expires in May 2026.

The risk of the Fed losing its political independence could undermine America’s financial markets, possibly leading to a meltdown in stocks and investors charging a premium to lend to the U.S. economy.

Here’s what to know:

Ousting Powell risks setting off market panic

The Fed chair has been an obstacle in Trump's efforts to gain total control over the executive branch.

Powell and his board have the dual mandate of maximizing employment and keeping prices stable, a task that can require them to make politically unpopular moves such as raising interest rates to hold inflation in check. The general theory is that keeping the Fed free from the influence of the White House — other than for nominations of Fed officials — allows it to fulfill its mission based on what the economy needs, instead of what a politician wants.

An attempt to remove Powell from his job before his term ends would undercut the Fed’s long-standing independence from day-to-day politics and could lead to higher inflation, higher interest rates and a weaker economy.

The Fed's main headquarters is over 90 years old

The Fed says its main headquarters, known as the Marriner S. Eccles building, was in dire need of an upgrade because its electrical, plumbing and HVAC systems, among others, are nearly obsolete and some date back to the building's construction in the 1930s.