National Economic Council Director Kevin Hassett indicated on Sunday that scrutiny over President Donald Trump’s authority to fire Federal Reserve Chair Jerome Powell is ongoing.
Hassett was questioned during an interview on ABC News’ ‘This Week’ regarding whether Trump had the power to dismiss Powell, a move the president has hinted at due to Powell’s management of interest rates.
Hassett responded, ‘That’s a thing that’s being looked into.’
He added, ‘But certainly if there’s cause, he does.’
This discussion arises after Office of Management and Budget Director Russell Vought expressed his dissatisfaction with the Federal Reserve headquarters renovations and communicated to Powell that Trump was ‘extremely troubled’ by what he termed the ‘mismanagement of the Federal Reserve System.’
Vought’s correspondence included a series of questions regarding the renovations, particularly whether the project strayed from plans sanctioned by the National Capital Planning Commission.
When asked whether the cost of these renovations could serve as justification to fire Powell, Hassett suggested that the president’s course of action would largely depend on the responses provided to Vought’s inquiries.
Donald Trump has persistently criticized Powell for his reluctance to lower interest rates, labeling him as ‘very stupid’ and coining the term ‘Too Late Powell.’
Powell, in contrast, has maintained that the Federal Reserve has refrained from cutting rates partly due to the ramifications of Trump’s tariffs, citing increased inflation forecasts as a concern.
In an NBC News interview late last year, Trump stated he had no plans to cut Powell’s term short, which is set to expire in May 2026.
However, Trump’s recent remarks indicate a growing impatience with Powell’s tenure; in an April post to Truth Social, he remarked that ‘Powell’s termination cannot come fast enough.’
Despite this, just days later, Trump assured reporters that he did not intend to remove Powell.
The Supreme Court’s decision in May granted the president the authority to fire members of independent federal agencies but highlighted that this ruling might not apply to the Federal Reserve.
The court described the Fed as a ‘uniquely structured, quasi-private entity.’
As the White House and Federal Reserve’s Board of Governors did not immediately respond to requests for further clarification on Hassett’s statements, questions linger about the implications of a possible dismissal.
In a separate but related economic development, Trump recently announced steep tariffs on imports from Brazil, set to take effect on August 1.
These tariffs, aimed at addressing perceived trade deficits, have sparked significant discussions about the future of potential trade agreements.
Trump’s 50% tariff on Brazil, announced in a letter, reflects his concerns over the treatment of former President Jair Bolsonaro, who faces legal troubles regarding allegations of plotting a coup following his electoral defeat in 2022.
In his letter, Trump justified the tariff by saying it was ‘due in part to Brazil’s insidious attacks on Free Elections.’
Hassett elaborated on this matter during the interview, explaining, ‘Normally, it’s not necessarily about a specific country, but with Brazil, it is.’
He affirmed that the actions of the Brazilian government have been a source of surprise and concern for the president.
When pressed on the authority under which Trump could impose such tariffs based on a country’s judicial system, Hassett pointed to the International Emergency Economic Powers Act (IEEPA).
This act grants the president the authority to act in situations deemed a national defense emergency or national security threat.
Responding to inquiries about how Brazil’s legal handling constituted a national security threat, Hassett sidestepped the question, noting, ‘Well, that’s not the only thing.’
He further shifted the focus back to trade deficits, emphasizing, ‘The bottom line is that what we’re doing, absolutely, collectively, across every country, is we’re on shoring production in the U.S.’
This strategy aims to mitigate the risks associated with substantial trade deficits, which Hassett described as jeopardizing domestic production capabilities during potential national security crises.
However, it is noteworthy that the U.S. recorded a $7.4 billion trade surplus with Brazil last year, a fact that was brought to light during the discussion.
Hassett responded to this information by asserting that without a comprehensive strategy, challenges such as trans shipping could undermine the administration’s objectives.
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