US President Trump issued a strong statement on Wednesday (April 15), threatening to remove Federal Reserve Chairman Jerome Powell from his seat on the Federal Reserve Board of Governors if he does not resign from his position at the end of his term as chairman on May 15.

This statement further escalated the standoff between the two sides and will seriously disrupt the Federal Reserve's consistently smooth power transition process.

With the chairman's term coming to an end, the positions of the board members have become the focus.

Jerome Powell's term as Federal Reserve Chairman will officially end on May 15. However, the ongoing criminal investigation against him, along with the continued pressure from the Trump administration, has made the transfer of power at the Federal Reserve exceptionally complicated.

Trump further emphasized the ongoing criminal investigation, stating that it proved Powell's "incompetence." He made it clear that if Powell was unwilling to leave the Federal Reserve altogether, "then I will have to fire him."

During the interview, host Maria Bartiromo asked directly, "Do you want Powell to step down completely?"

Trump responded, "I've been holding back from firing him if he doesn't leave on time. I did want to fire him, but I don't like creating controversy. You know, I want to avoid controversy, but he'll be fired."

Criminal investigation hinders confirmation of new chairman's nomination

The criminal investigation into Powell primarily concerns allegations of significant cost overruns in the Federal Reserve building renovation project. The investigation, led by U.S. Attorney Jeanine Pirro for the District of Columbia, shows no signs of ending.

This investigation not only complicates the nomination process for Warsh as the new Federal Reserve chairman, but may also lead to Powell remaining on the Federal Reserve Board of Governors until the investigation concludes, thus prolonging the uncertainty surrounding the power transition.

Trump's latest statement further underscores the seriousness of the situation. If Powell insists on not resigning from his post, the government will face even more complex legal and institutional challenges.

New Chairman Walsh faces greater uncertainty.

Warsh is Trump's nominee to succeed Powell as Federal Reserve Chairman, but the Senate confirmation process for him has been delayed due to related investigations.

If Warsh ultimately succeeds in becoming chairman and gains more control of the seven-member Federal Reserve Board of Governors, he will have greater room to maneuver in setting monetary policy and pushing for other reforms the government may wish to implement.

However, Trump has only appointed three current board members, one of whom, Stephen Miran, has already completed his term and needs to vacate his seat before Walsh can officially join the board. This series of personnel changes is currently fraught with uncertainty due to the investigation and standoff.

Overall impact

Trump's tough pressure on Powell and his threat to fire him from his post as a governor mark a highly tense and complex phase in the Federal Reserve's power transition. This event not only tests the Fed's independence but may also have a profound impact on the continuity and stability of future US monetary policy.

The prospect of Warsh's confirmation and whether Powell will eventually leave the Federal Reserve Board of Governors will remain the focus of continued attention from the market and various sectors.