Trump could potentially fire Powell over Fed renovations, Hassett says
Why it matters: The administration's relentless efforts to get Powell to either cut interest rates or leave have called the future independence of the central bank into question.
The mere threat of firing Powell caused a sell-off in markets earlier this year that sent interest rates soaring.
Trump said as recently as Friday he won't fire Powell, but Hassett's comments appear to crack the door open again.
Catch up quick: The administration has ramped up pressure on the Fed over cost overruns for its headquarters renovation project, which Hassett said on ABC's "This Week" was $700 million over budget.
On Thursday, Office of Management and Budget head Ross Vought sent Powell a letter demanding answers to a series of questions about those overruns and project changes, and whether they complied with the law.
Fed watchers see the building issue as an administration effort to build a case to oust Powell for cause.
What they're saying: "I think whether the president decides to push down that road or not is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed," Hassett told ABC.
Asked if Trump has the authority to fire Powell, Hassett said: "That's a thing that's being looked into, but certainly, if there's cause, he does."
The intrigue: Hassett is widely seen as a leading contender to replace Powell, whose term as Fed chair expires in May.
What to watch: Vought's July 10 letter gives Powell seven business days to respond, which takes him through the end of this week.
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New York Post
32 minutes ago
- New York Post
Trump economic adviser says White House probing Fed renovation costs, authority to fire Powell
President Trump has the authority to fire Federal Reserve Chair Jerome Powell for cause if evidence supports that, White House economic adviser Kevin Hassett said on Sunday, and that the Fed 'has a lot to answer for' on renovation cost overruns at its Washington headquarters. Hassett, the director of the National Economic Council, told ABC's 'This Week' program that any decision by Trump to try to fire Powell over what the Trump administration calls a $700 million cost overrun 'is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed.' Vought, the White House budget director, last week slammed Powell over an 'ostentatious overhaul' of the Fed's buildings and answers to a series of questions about the $2.5 billion project. In a posting on X, he compared the project to France's Palace of Versailles, with rooftop gardens, water features and 'premium marble.' Advertisement 4 Renderings of the Federal Reserve's headquarters when completed. NCPC Hassett's comments confirm that the Trump administration is actively exploring the renovation costs and Powell's testimony about the project as a possible avenue to try to fire the Fed chief well before his term as chair ends next May. Trump has repeatedly called for Powell's resignation for failing to lower interest rates since Trump returned to office in January. Advertisement Vice President JD Vance piled on more criticism in a post on X on Sunday: 'Fed has been totally asleep at the wheel. As President Trump says, they're TOO LATE–both in fighting inflation during Biden and in lower rates now.' 4 National Economic Council Director Kevin Hassett. WILL OLIVER/EPA/Shutterstock The Fed on Friday appeared to rebut some of Vought's claims in a 'Frequently Asked Questions' posting about the project, describing it as the first complete renovation of the buildings since their construction in the 1930s, including removing lead contamination and more asbestos than initially anticipated. It shows pictures of leaky pipes and roofs and notes that costs have risen due to increased material, equipment and labor costs. It denied assertions that there were VIP dining rooms or elevators being installed. The project will have a 'green roof' using plants to help manage water runoff and aid with heating and cooling, as many other federal buildings have used for decades but no terrace access. Advertisement 'There are no new water features, there's no beehives, and there's no roof terrace gardens,' Powell told U.S. senators in testimony in June, denying excessive spending on the project. Powell said the almost 90-year-old headquarters 'was not really safe, and it was not waterproof' while acknowledging cost overruns. The Fed has said that the project, which includes upgrades to an adjacent building, will consolidate staff into a single campus and reduce off-site lease costs. As of February, a Fed Inspector General report estimated that costs had risen to $2.4 billion from an estimate of $1.9 billion two years earlier, a $500 million increase. 4 The Fed's nearly 90 year-old headquarters 'was not really safe, and it was not waterproof,' Fed Chair Jerome Powell told senators last month, while acknowledging cost overruns. REUTERS Advertisement Asked if Trump had the authority to fire Powell, Hassett, whose name has emerged as a potential candidate to take over the Fed chair job, said: 'That's a thing that's being looked into, but certainly if there's cause, he does.' Rep. French Hill (R-Ark.), who chairs the powerful House Financial Services Committee, said Trump did not have the authority to fire the Fed chair, but Congress would continue to provide strong oversight of the central bank. 'Just because Congress created the Fed and that we believe that it should be independent in the setting of monetary policy, it doesn't mean that it's immune from criticism,' Hill told CBS' Face the Nation. 'Every president since World War II has had choice words for the Fed chair when they've not been in sync with the direction of the president.' 4 Fed Chair Jerome Powell's term ends next month. Getty Images Separately on Sunday, Kevin Warsh, a former Fed Board of Governors member who is considered a potential candidate to replace Powell, said the U.S. central bank needs 'regime change' that goes beyond the chair position. 'The Fed has lost its way. It's lost its way in supervision, it's lost its way in monetary policy,' Warsh said in a Sunday interview on Fox's 'Sunday Morning Futures' program. 'We need regime change at the Fed, and that's not just about the chairman. It's about a whole range of people, it's about changing their mindset and their models, and frankly it's about breaking some heads, because the way they've been doing business is not working.'
Miami Herald
32 minutes ago
- Miami Herald
Where's the inflation? Not in stores
It is one of those mysteries that drive economists and politicians a little bit crazy. The Trump Administration is raising tariffs in a bid to reset world trade. Tariffs usually cause prices to rise, but, to paraphrase the late Clara Peller, where's the inflation? Don't miss the move: Subscribe to TheStreet's free daily newsletter Probably it's on the way but slowly. Business works that way. You can plug a lot of numbers into a spreadsheet and get immediate answers to questions like "How much inflation?" But the reality can and will be slow in emerging. Related: Earnings season begins: Pay attention to all the tariff talk So, the Trump Administration is arguing there is no real inflation threat, and the Federal Reserve should cut interest rates. The Fed's federal funds rate is a 4.25% to 4.5%. But critics will note that tariff increases only started in April, and goods coming into the United States might take two to three weeks to make the crossing from, say, Shanghai to Los Angeles. Then, it takes time to get to the the customers' warehouse and mor time to arrive at their ultimate destination. And if the retailer guesses that tariffs would boost costs and brought inventory in before the tariffs took effect, then the prices may not reflect the added costs. Yet. So, two economic reports will test that theory this week: The Consumer Price Index report, due Tuesday, and the Producer Price Index report, due Wednesday. Both are expected to show inflation ticking up slightly in June from May, though not by much. FactSet expects consumer prices to rise 0.23% on the month and 2.6% year-over-year. Excluding food and energy, the gains are expected to be as much as 3% year-over-year. Lord knows, the government is collecting a lot of tariff revenue: $27.2 billion in June and more than $113 billion so far in the 2024-25 fiscal year. The fiscal year ends on Sept. 30. Bloomberg/Getty Images Why the delay for an effect on the CPI: Because, probably, retailers are waiting for as long as possible to boost prices. Toyota (TM) is planning to raise its prices by an average $270 per vehicle starting in July. Walmart (WMT) has already raised prices on toys and imported foods, like bananas. Economists from Bank of America expect that a rise in core goods prices will be the main driver of the acceleration of inflation in June, Morningstar's Sarah Hansen wrote in a Friday article. They cited "broad-based price hikes … owing in part to tariffs." They are also looking for an uptick in prices in the services category, including hotels and airfares, as well as in medical services. Related: Chapter 11 bankruptcy looms as major car rental company closes At the same time, the Producer Price Index report, due Wednesday, also show some acceleration of costs as well. It's an early signal of what consumer inflation might look like. To produce and deliver goods takes energy, and the price of crude oil is up nearly 20% since their April bottom. But, again, it's early in the cycle. Crude settled Friday at $68.45 per 42-gallon barrel and was up to $68.72 in Sunday evening trading. More Experts Analyst makes bold call on stocks, bonds, and goldTheStreet Stocks & Markets Podcast #8: Common Sense Investing With David MillerVeteran fund manager sends dire message on stocks Weekly jobless claims report. Due Thursday. This measures worker filing for unemployment claims from the week before. It's a good early warning signal for the economy. The Fed's Beige Book report. Due Wednesday afternoon. The narrative report surveys all of the Federal Reserve Bank districts and should offer some insight as what price pressures businesses are seeing what they're doing to cope. Home builder confidence. Due Thursday from the National Association of Home Builders. This report has shown how frustrated builders are about the state of the housing market. The problem many builders find now is that mortgage rates are still relatively high and, combined with stubbornly high prices, makes selling a new home difficult. Housing starts. Due Friday morning. This will quantify how active the new-home universe. Housing starts are a tricky number because they're imputed. Permits are a better gauge they measure approvals to start construction. Related: White House makes bold decision on Fed Chair Powell's future The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
an hour ago
- Yahoo
Grant Cardone Says Jerome Powell Intentionally 'Set Middle Class Back A Decade' And Froze the Housing Market — 'Tell Me I'm Wrong'
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. When Grant Cardone lights up social media, he doesn't bury the lead. "Jerome Powell has set the middle class back a decade. Tell me I'm wrong...," he wrote in a fiery X post last week, sharing a clip from his July 1 appearance on Fox News. The caption was blunt, the tone unmistakable — and the message? The Federal Reserve chair, in Cardone's words, is the reason American families are stuck, broke, and locked out of the booming economy. In the Fox News interview, Cardone — a real estate investor and entrepreneur — said Powell "actually want[ed] to damage, as he promised a year ago, the middle class," referencing the Fed chair's past comments about raising rates to fight inflation, even if it caused economic pain. Don't Miss: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here's , starting today. $100k+ in investable assets? – no cost, no obligation. "He is either stupid — which I don't think is the case — or he's unpatriotic," Cardone said. "Everywhere Jerome Powell is involved, prices are still up. Mortgages are too expensive." Cardone argued that the Fed has never truly controlled inflation and that Trump-era policies had more to do with the recent price improvements than anything Powell has done. "President [Donald] Trump has had more to do with bringing inflation down in this country," he said. "The tariffs, taxes, regulation — inflation has come down, including oil production." Cardone called the housing market the one piece of the economy that hasn't budged. "The only part of our economy that is frozen is housing," he said. "That's on Jerome Powell. He literally set the middle class back a decade." Trending: It's no wonder Jeff Bezos holds over $250 million in art — A few days later, Cardone echoed and expanded those comments on Facebook, saying Powell has "done more harm to American housing than anyone in history," and that "the housing market has FROZEN 12 trillion dollars of Americans' net worth." "Trapped people in their homes," he added, "who can't access their equity to invest because of Powell's damage." Cardone claimed Trump's policies — including tariff negotiations, tax reform, and oil production — helped bring inflation down, while Powell and the Fed stalled progress. "Lower prices show up everywhere except in housing," he wrote, "where Jerome Powell and friends stand in the way of a Donald Trump economy." Then came the sharper speculation: "Powell is either stupid or he is unpatriotic, being controlled like a puppet by those who want to circumvent a Donald Trump America."According to Cardone, there's a clear fix: Powell steps down. "The moment Jerome Powell is gone," he said, "this economy will go into a Golden Era." released its June report this week, and while the housing market isn't dead — it's definitely stuck in second gear. Active listings jumped nearly 29% year-over-year, passing the one million mark for a second straight month. Still, total inventory remains nearly 13% below pre-pandemic levels. Pending sales dipped 1.6%, homes are sitting on the market longer — 53 days on average — and more than 1 in 5 sellers cut their asking price, the highest June rate since at least 2016. Prices haven't skyrocketed, but they're not coming down much either. Between high rates, slow sales, and hesitant buyers, the slowdown isn't just visible — it's measurable. Love him or hate him, Cardone's not shy about where he thinks blame — and recovery — begins. Read Next: Over the last five years, the price of gold has increased by approximately 83% — Investors like Bill O'Reilly and Rudy Giuliani are . Image: Shutterstock This article Grant Cardone Says Jerome Powell Intentionally 'Set Middle Class Back A Decade' And Froze the Housing Market — 'Tell Me I'm Wrong' originally appeared on
