Kevin Hassett told CNBC he expects Jerome Powell to step down from the Fed board if an upcoming Inspector General report on a $2.5 million renovation satisfies him. Powell has said he will remain on the Board until Inspector General Michael Horowitz completes his review and has criticized a prior probe by U.S. Attorney Jeanine Pirro as politically driven. Powell’s chairmanship ends this month, though his board term continues through January 2028. Kevin Warsh’s nomination to succeed Powell advanced out of committee on a 13-11 vote and faces a Senate procedural vote.
Hassett Says Powell Could Step Down From Fed Board If Inspector General’s Report Pleases Him
Hassett predicts Powell will leave Fed if he’s ‘happy’ with IG report
National Economic Council Director Kevin Hassett told CNBC on Monday he expects Federal Reserve Chair Jerome Powell to leave the Fed’s board of governors if an upcoming internal Inspector General report on a controversial renovation satisfies him. The renovations — which cost roughly $2.5 million — have drawn criticism from President Donald Trump and prompted multiple reviews.
Powell, whose term as Fed chair expires this month, has said he intends to remain on the Board of Governors until Federal Reserve Inspector General Michael Horowitz completes his review of the project. Powell’s separate appointment as a Fed governor runs through January 2028.
Speaking with Joe Kernen on CNBC’s "Squawk Box," Hassett said he "would guess that the off-ramp for [Powell] would be if the inspector general’s report comes out soon and he’s happy with the results." He added, "If that occurs, I would expect that he would leave."
Horowitz opened his probe in late April after U.S. Attorney for the District of Columbia Jeanine Pirro dropped her criminal investigation into Powell’s handling of the $2.5 million renovation project. Powell has criticized Pirro’s inquiry as politically motivated and has said he will not leave the Board until the inspector general’s review is complete.
"I have said that I will not leave the board until this investigation is well and truly over with transparency and finality, and I stand by that," Powell told reporters after his final meeting as chair of the Federal Open Market Committee. "I’m encouraged by recent developments, and I’m watching the remaining steps in this process carefully."
Meanwhile, President Trump’s nominee to replace Powell as Fed chair, Kevin Warsh, has not yet been confirmed. The Senate Banking Committee advanced Warsh’s nomination last month by a 13-11 partisan vote. A procedural vote to limit debate on Warsh’s nomination was scheduled for Monday evening ahead of a full Senate confirmation vote.
Hassett’s comments and the timing of the inspector general’s report could shape Powell’s next steps and the broader leadership transition at the Federal Reserve. Observers say the outcome may influence market expectations and the administration’s final decision on the Fed chairmanship.
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