Trump renews calls for former Federal Reserve chief Jerome Powell's resignation

WASHINGTON, 1 OCTOBER 2026 —

Trump Renews Powell Resignation Demands as Fed Inspector General Clears Renovation Project of Criminal Wrongdoing

The report, released Wednesday, has reignited a political battle that has pitted Trump against the Fed for years, with the former president accusing Powell of incompetence and demanding accountability amid escalating tensions over monetary policy and institutional independence.

The IG’s findings—while stopping short of recommending criminal charges—underscore the depth of Trump’s frustration with Powell, whom he has repeatedly targeted for raising interest rates to combat inflation, a move the former president has framed as politically motivated. The renovation project, now costing an estimated $2.4 billion, has become a symbol of broader disputes over Fed governance, with Trump seizing on it as evidence of wasteful spending and poor leadership.

His latest remarks, posted on Truth Social, accused Powell of "corruption or incompetence" and called for legal action against him, marking a sharp escalation in a feud that has dominated financial and political discourse in the U.S. for nearly a decade.

The IG’s 120-page report concluded that while no federal criminal laws were violated, the Fed’s oversight of the renovation—spanning two historic buildings on Washington’s National Mall—was riddled with "extensive deficiencies." These included a failure to enforce a "guaranteed maximum price" contract, which was supposed to cap costs but was never properly established.

Instead, subcontracts were awarded in a way that allowed expenses to spiral, with the Fed ultimately paying $346 million for plumbing and air conditioning alone—triple the initial estimate. The report also dismissed claims by Trump allies that luxury upgrades, such as marble, water features, and garden terraces, drove up costs, stating these elements "did not materially contribute" to the overruns.

Trump’s response was immediate and unyielding. In a post on Truth Social, he wrote: "At a minimum, 'Too Late' Powell should be forced to resign from the Board. He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy (only on 'TRUMP!')." He further directed Attorney General Todd Blanche to "study the report, and make a determination as to what to do," signaling potential legal pressure on Powell.

The former president’s rhetoric reflects his long-standing grievance with Powell, whom he first criticized in 2018 for not cutting interest rates aggressively enough during his first term. Trump had nominated Powell for the Fed chairmanship in late 2017, only to later turn against him as inflation surged and the central bank raised rates to cool the economy—a move Trump framed as harmful to his re-election prospects.

Powell, who stepped down as Fed chair in May but remains a governor on the Board, has refused to engage directly with the report, maintaining his silence on the IG’s findings. His predecessor as chair, Kevin Warsh, who took over in May, has pledged to implement the report’s recommendations, including hiring an independent auditor to verify all awarded costs and ensure compliance.

Warsh’s statement underscores the Fed’s commitment to addressing the oversight failures, though it does little to quell Trump’s demands for Powell’s removal. The former chair has previously dismissed the cost overruns as the result of unforeseen challenges, such as asbestos abatement and soaring material and labor costs during deep underground construction—a narrative the IG report did not dispute.

The political fallout from the report has split along partisan lines, with Republicans and Democrats offering starkly different interpretations. Senator Tim Scott, the chair of the Senate Banking Committee and a Trump ally, called the cost overruns "egregious" and vowed "rigorous oversight" of the Fed, framing the issue as one of fiscal responsibility.

In contrast, Senator Elizabeth Warren, the committee’s top Democrat, dismissed Trump’s renewed attacks as a "witch hunt," arguing that the report provided "no basis" to restart the former president’s campaign against Powell. The divide reflects broader tensions over the Fed’s independence, with Trump’s allies viewing the central bank as an unelected institution resistant to political pressure, while Democrats and some Republicans defend its autonomy as critical to economic stability.

The renovation project’s ballooning costs have also drawn parallels to other high-profile government overruns, including Trump’s own White House ballroom renovations, which have doubled from initial estimates to at least $400 million. The irony of Trump criticizing the Fed for wasteful spending while overseeing similar projects has not gone unnoticed by critics, who argue that his focus on Powell’s tenure is more about policy influence than fiscal prudence.

Powell himself has framed the dispute as an attempt to politicize the Fed, particularly after U.S. Attorney Jeanine Pirro issued subpoenas in January 2026 seeking information about the cost overruns and his congressional testimony. Powell disclosed the DOJ’s threat to criminally indict him in a rare Sunday night video statement, calling it an "attempt to intimidate" an institution that must prioritize the national interest over political preferences.

The legal saga took a dramatic turn in March 2026, when a federal judge quashed Pirro’s subpoenas, ruling that they were a pretext to pressure Powell into lowering rates or resigning. Pirro subsequently closed her investigation and referred the matter to the Fed IG, a decision that allowed Trump’s nomination of Warsh as Powell’s successor to proceed.

Despite this, Powell has remained on the Fed Board, stating in April that he would not resign until the investigation was "well and truly over, with transparency and finality." His defiance has only fueled Trump’s determination to see him removed, with the former president now framing the IG report as further proof of Powell’s unfitness to serve.

As of Wednesday, Pirro’s office confirmed it had received the IG report and was reviewing it, though no further action has been announced. The report’s release has injected new urgency into the debate over the Fed’s future, with Trump’s latest demands for Powell’s resignation signaling that the conflict is far from resolved.

The renovation project, once a technical issue of cost management, has now become a battleground in a broader struggle over the central bank’s independence—and by extension, the direction of U.S. monetary policy. With Warsh now leading the Fed, the question remains whether the institution can navigate this political storm while maintaining the trust of markets and the public.

For now, the focus remains on Powell, whose fate hangs in the balance as Trump’s calls for his ouster grow louder.