In a significant development for U.S. monetary policy, former President Donald Trump has publicly stated he has no immediate intention to remove Federal Reserve Chair Jerome Powell from his position. This declaration comes despite an ongoing Justice Department investigation into the central bank's renovation activities.
Trump's Stance on Powell and the Fed Probe
During an interview with Reuters on Wednesday, January 15, 2026, Trump was direct in his response to questions about Powell's future. "I don't have any plan to do that," Trump stated, referring to firing the Fed chair. However, he left the door open for future action, noting it was "too early" to conclude whether the probe could provide grounds for removal.
"Right now, we're in a little bit of a holding pattern with him, and we're going to determine what to do. But I can't get into it," Trump added, creating an atmosphere of uncertainty around Powell's tenure.
The investigation, which Powell confirmed on Sunday, involves the Justice Department serving the Fed with grand jury subpoenas. The probe focuses on a renovation project and Powell's subsequent testimony to Congress about it. Powell has characterized the investigation as a "pretext for a broader pressure campaign" concerning interest rate decisions.
Moving Forward with a Nomination Despite Pushback
Despite the political turbulence, Trump confirmed his intention to push forward with nominating Powell's replacement. He plans to announce his choice within "the next few weeks." This timeline persists even in the face of opposition from Senator Thom Tillis, a retiring North Carolina Republican on the Senate Banking Committee. Tillis has threatened to block all Fed nominations until the Justice Department investigation is fully resolved.
When asked about criticism from Republican lawmakers concerned the probe is an attempt to influence monetary policy, Trump was dismissive. "I don't care," he said. "There's nothing to say. They should be loyal. That's what I say."
Potential Candidates and the Question of Fed Independence
Trump highlighted two individuals he views as strong contenders for the role. He praised top White House economic adviser Kevin Hassett and former Fed Governor Kevin Warsh, referring to them as "very good." He also hinted at other candidates, stating, "You have some other good people too, but I'll be announcing something over the next couple of weeks."
The situation raises profound questions about the Federal Reserve's cherished independence. Federal law stipulates that Fed governors, including the chair, can only be removed "for cause," not simply due to policy disagreements. Powell has framed the current challenge starkly, asserting the core issue is "whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation."
This episode marks a dramatic escalation in the long-running tension between the Trump administration and the central bank. Trump has repeatedly criticized the Fed's interest rate decisions and has previously contemplated firing Powell before his term as chair concludes in May. The ongoing probe and the imminent nomination process ensure that the spotlight on the Fed's autonomy will only intensify in the coming weeks.
