Trump adviser Hassett urges Powell to leave Fed board after renovation report

U.S. President Donald Trump’s top economic adviser, Kevin Hassett, said on Sunday it was "time for (Powell) to move on" from the Federal Reserve’s board, after an internal report faulted management of the central bank’s headquarters renovation but found no criminal wrongdoing.

Hassett, head of the National Economic Council at the White House, made the comments on Fox News’ Sunday Morning Futures when asked whether former Fed Chair Jerome Powell should resign. "I think that it’s time for him to move on and to respect the independence of the Fed," he said.

The Fed’s internal watchdog said in a Sept. 30 report that it found no evidence of criminal wrongdoing and did not identify any "administrative misconduct" connected to the $2.4 billion renovation project in Washington. It cited management deficiencies that helped almost double the project’s original cost.

Trump responded with a social media post saying Powell, whom he had relentlessly pressured to lower interest rates as Fed chair, "should be forced to resign" from the board.

U.S. Attorney General Todd Blanche, whom Trump asked to review the report, said in an interview on Friday that the Justice Department would not reopen a criminal investigation of Powell based on the findings.

The Fed has said it will engage an independent auditor to scrutinize the building costs. Blanche said the Justice Department could investigate if that review finds evidence of criminal wrongdoing. "If they learn anything that rises to any kind of criminal misconduct, you better believe we’re going to investigate that," he said.

Powell has been on the Fed’s board of governors since leaving his position as chair in May, breaking with the precedent of Fed chairs leaving the central bank when their leadership terms end. He has said threats of criminal investigations into him and the Fed left him with no option but to stay, a stance Trump and other administration members condemned.

Trump has long pressed the Fed to lower borrowing costs. Last month, policymakers under Fed Chairman Kevin Warsh voted unanimously to raise interest rates by a quarter percentage point in the face of stubborn inflation.

"I disagree with that decision, but we respect that he was doing that for the right reasons," Hassett told Fox News of Warsh’s vote.

Trump has said Warsh, whom he picked to succeed Powell, should make his own decisions. He told Time magazine, "I probably would have voted against the board if I were him."