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National Economic Council Director Urges Former Fed Chair Jerome Powell to Resign from Board
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Hassett Calls for Powell’s Departure from the Federal Reserve Board
National Economic Council Director Kevin Hassett argued that former Federal Reserve Chair Jerome Powell should leave the Fed’s Board of Governors. Hassett said Powell’s continued service after his chairmanship ended is “completely unprecedented” and that stepping down would help preserve the central bank’s independence. He likened the situation to a former corporate CEO remaining in the office next to a new CEO, suggesting that such an arrangement undermines effective governance.
Background: Powell’s Extended Tenure and Recent Tensions
Powell’s term as Fed chair concluded while he retained a seat on the Board, a circumstance Hassett described as unique in modern U.S. monetary history. The issue has surfaced amid a broader dispute between President Donald Trump and Powell over interest-rate policy, which has intensified in recent months. Additionally, Powell was previously investigated by the Department of Justice for cost overruns on a multibillion-dollar renovation of the Fed’s Washington, D.C., headquarters; the investigation did not result in charges.
Official Statements & Responses
Attorney General Todd Blanche confirmed that the Justice Department will not reopen the criminal investigation into Powell’s renovation-related matters. The White House has not issued a formal comment on Hassett’s remarks, and the Federal Reserve has not responded to requests for comment.
Potential Implications for Fed Independence
Hassett’s recommendation reflects a view that removing Powell from the Board would reduce perceived partisan influence and restore a more traditional separation between the chair’s term and board service. If Powell were to resign, the vacancy would allow the president to appoint a successor, potentially shifting the Board’s composition. Observers note that any change could affect expectations for future monetary policy, though the Fed’s statutory independence would remain intact.
Why It Matters
The debate highlights ongoing concerns about the balance between political oversight and central-bank autonomy. While no legal requirement compels a former chair to vacate a board seat, Hassett’s stance underscores a growing sentiment among some policymakers that maintaining clear boundaries is essential for credible monetary governance.