Trump signals Powell replacement after investigation over $2.5bn renovation

In an apparent escalation in the long-standing feud between the United States (U.S.) President Donald Trump and Federal Reserve chair Jerome H. Powell, the federal prosecutors have opened a criminal investigation into Powell.

According to officials briefed on the matter, the inquiry against the Fed chair was approved by a longtime Trump ally, Jeanine Pirro, in November. The investigation is related to the renovation of the central bank’s headquarters in Washington.

The investigation includes analysis of Powell’s statements, whether he lied to Congress and the examination of spending records related to the $2.5 billion renovation.

Powell questioned the motivation behind the investigation and called it “unprecedented”. He defended himself stating, “I carried out my duties as chair without political fear or favor.”

Trump nominated Powell for the Fed chair in 2017; however, their relations have not been great since then as Powell has ignored multiple calls by Trump to slash the interest rates significantly.

In an interview with New York Times on Wednesday, President Trump said that he has decided who will replace Powell as Fed chair.Powell’s term as chair is set to end in May, while his term as governor runs through January 2028.

The frontrunner for the finance czar office is the U.S. president’s top economic advisor Kevin A. Hassett.