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I'm Stephen Carol and this is Here's Why, where we take one news story and explain it in just a few minutes with our experts here at Bloomberg.

You should resign immediately.

We should get somebody in there that's going to lower interest rate.

It's always too late, a little slow, and I'm not happy with him.

Too late.

I him too late Powell, because he's always too late.

Too late Powell, that's his nickname, and it's a shame.

It's ridiculous.

I mean, he goes out pretty so unfortunately, because I think he's terrible.

Do you ever have a guy that's.

Not a smart person and you're dealing with him and you.

Have to deal he's not a smart guy.

I'd love him to resign if you want to taste it done, lousy.

Jump and the fake news is saying, oh, if you fired him, it would be so bad.

It would be so bad.

I don't know why it would be so bad.

It's become one of the US President's most common complaints.

Donald Trump wants lower interest rates and he thinks Federals serve Chair Jerome Powell isn't doing it fast.

Enough.

Powell's term heading up the US Central Bank runs until May of next year, but the President and his allies are taking every opportunity to criticize him.

A recent controversy over the renovation of a Federal Reserve building has again raised the question of whether Trump could remove the FED chair before his term is up.

But here's why it's not easy to fire Jerome Powell.

Our Federal Reserve reporter Amara Mackway joins me now for more.

Amara, great to talk to you.

We've spoken before about Donald Trump criticizing Jerome Powell.

Have those complaints changed since he returned to the White House?

So, essentially, no, they haven't.

President Donald Trump, since he returned to office in January, has essentially been upset with the Federal Reserve because they have not lowered interest rates so far this year, and so his criticisms of Chair Powell and the FED largely center around this idea that he wants lower rates and the FED has not provided that for him this year.

Those really mirror some of the same complaints that he had about Powell and the FED during his first term.

He often called for lower rates during his first term, but this time the complaints have been really really relentless, and they've also taken on sort of this personal nature where President Trump has basically started calling Jerome Powell various names.

He's given him the nickname too Late to basically suggest that Chair Pal is often too late to make policy adjustments, and various other names.

So the attacks have gone beyond sort of Chair Powell's stance on interest rates to kind of the more personal nature.

And then, as you were talking about in the intro, this new line of attack is about this two and a half billion dollar renovation project that the FED is undergoing now at its headquarters in Washington, d C.

And that has opened up a new line of criticism from President Trump and some of his allies.

So how far has the President gone and saying that he wants to remove Jerome Powell from his job.

So most recently the President had has kind of said again that he does not plan to remove chair Pal from his job.

Earlier in the year, he had posted on social media that Chair Power's termination cannot come fast enough, and that had sort of made people speculate about whether he would try to remove him.

But then the market's freaked out a little bit, and so he kind of backed off of that and has continued to say that he's going to allow Chair Power to continue to serve in his role.

But what's interesting about this renovation project is that some of the people in Trump's orbit have started to suggest that the issue could amount to cause to fire Jerome Powell, which is a legal term around the FED.

There is this very high legal standard in order to be able to remove someone from the Federal Reserves Board of Governor, you need to have what's called cause, and the courts have generally taken that to mean like malfeasance or neglect of duty.

So the fact that someone in the Trump administration is saying that this issue could amount to cause has cause people to start to wonder, Okay, are people in Trump's world trying to kind of lay the groundwork to say, you know, President Trump, if you wanted to remove him, you could you could have had the ability to do that because this issue has given you the cause.

So there's been some speculation about that, despite the fact that publicly President Trump has continued to say he does not plan to remove Chair Pal.

So let's talk about this renovation issue.

Then, what do we know about what's happened and whether or not it could meet that legal definition.

So I will say the legal experts that I've talked to about this issue say that they do not think that it rises to the level of cause.

But essentially what has happened is that in recent weeks, this renovation project that the feed has been doing really for several years has come to the forefront again.

So there was a media report that characterized this renovation as very extravagant.

They called it essentially the Palace of Versailles, which, if you know, the Palace of Versailles, very ornate, huge, right Louis the fourteenth and so so that kind of brought this issue to the forefront.

So when Chair Pale was on the hill last month testifying before senators, he was asked about this and he kind of disputed some of what that media report was talking about.

He talked about, you know, we don't have these ornate features, we don't have a bunch of new marble, we don't have, you know, elevators going up to private dining rooms, really kind of pushing back on this idea that the project is overly ornate.

And so what we then saw after the hearing was one of the Trump administration officials.

Bill Pulte, who's the head of one of the federal housing agencies, come out and say that he felt that Chairpal had not been honest during that testimony about some of these features, and that's what he's saying rises to the level of cause.

And then he had Russ Vote of the Office of Management and Budget at the White House last week come out and send a letter to Chair Pale again saying like this doesn't add up, like we're very concerned about this, I want you to answer several questions about this project.

And then Vote said that that Pal had also grossly mismanaged the FED, so again kind of strong language, kind of suggesting that Pal had done something wrong.

And that's again what's kind of driving this speculation that maybe they're trying to set up this cause to remove him.

But what the FED says is that this again, this renovation has been going on for several years.

It involves two historic buildings, and so that requires like a lot of they have to sort of adhere to the laws around preserving historic buildings.

They have to take a lot of steps to make sure that these buildings aren't armed.

And also the FED has said that these renovation projects will allow them to put all their staff kind of consolidate their staff all in one place, and that will save money over the long term.

So really like a lot of this is in the eyes of the beholder.

If you want to kind of go after Pal and the FED, you're using this as your opportunity.

But the Fed, they're really just pushing back against this idea that it's like overly extraving it.

Has John, however, indicated that he might give in to all of this pressure and actually resigned from the job no indication whatsoever.

He has said several times previously that he plans to serve out the duration of his chair term.

And if you take the face the FED at its word, and they have said that Chairpal was honest in his testimony.

They've said that they are happy to be transparent about this project and provide more information about it.

They don't feel like they've done anything wrong.

So if you take the Fed at its word, and you take what Chaerpal has said about intending to serve out the duration of his term, it really doesn't seem like he's going to give into this pressure at all.

So one of the indications are that Jerome Powell will serve, as you say, to the end of his term.

Scott Bessant, the US Treasury Secretary, has said the formal process to find his replacement has started.

When should we expect Donald Trump to name someone?

And is there then a question that Jerome Powell becomes some sort of lame duck if we already know who's going to replace him.

Yeah, So besson has said that this process is going to be going on in the weeks and months, and I think trying to game out when President Trump is going to do anything, it's kind of not aw right.

He's known to change his mind on things, to go back and forth on things.

We've seen that on a number of issues, and so who knows.

But I will say that an interesting question that has also come up.

So Chairpowell's term as chair is up in May twenty twenty six, but his term as a governor on the FED Board goes on into twenty twenty eight, and so that actually means that Chair pal has the option to stay on the FED Board even after his chair term is up.

And when he's been asked whether he does intend to stay on the board even when he's no longer chair, he has declined to answer.

So that has raised some eyebrows, like, hmm, is he is he going to stay on the board to kind of safeguard in case President Trump picks someone who is seen as a potential threat to FED independence, so he can stay there and kind of hold the line against someone like that.

And so that is another sort of wrinkle that has come up for the Trump administration as they begin the selection process.

And you saw a Treasury secretary best and say yesterday chairpal should lead when his chair term is up, you should not stay because obviously if he stays on the board, then that creates question about where the real sort of nexus of power and influence live even after the president names who he wants to take over the chair role.

So a lot of interesting wrinkles in this whole process is starting to come up.

Yeah, and we'll watch the developments with interest.

Our Federal Reserve reporter Amara Amaqway, thank you very much for joining us.

For more explanations like this from our team of three thousand journalists and analysts around the world, go to Bloomberg dot com slash explainers.

I'm Stephen Caroll.

This is here's why.

I'll be back next week with more.

Thanks for listening,