Trump Calls for Jerome Powell's 'Forced' Resignation After Fed Inspector General Report

< < It’s Jerome Powell’s fault, and he should be forced to resign, IMMEDIATELY! > > Donald Trump demanded on September 30 that Jerome Powell leave the Federal Reserve Board of Governors, on the day the institution's inspector general (its independent internal auditor) released its report on the renovation of the headquarters in Washington. The document highlights management failures and does not cite any criminal violations.

We already reported in August 2025 on Trump’s threat of legal action regarding this same project. Powell left the presidency of the Fed in May 2026, but he still sits on the board. Even without the presidency, Powell remains a voice on the board that sets rates, and every Fed decision impacts bitcoin.
Key points from this article:

• Donald Trump demanded Jerome Powell's resignation following a report revealing management failures in a Fed project.
• The Fed's inspector general noted an increase in the project budget but found no criminal violations or administrative misconduct.

Fed Inspector General Report: Failures, No Crime

The approved budget for the project increased from $1.317 billion in February 2020 to $2.381 billion in December 2024, according to Fox Business, which cites the report. The inspector general acknowledges legitimate increases (materials, labor, asbestos, contaminated soil). He also points to poor project management, with four contracts awarded without sufficient competition.

The board did not receive an estimate from the project manager until January 2026, three and a half years after work began, while over $2 billion in contracts had already been awarded. By July 2026, no guaranteed maximum price (a contractual cost ceiling) had yet been set, according to Investing.com.

On the criminal side, the text is clear. The inspector general states that he found < < at no time > > a reasonable basis to believe that a violation of federal criminal law had occurred. He also does not find any administrative misconduct.

Trump responded on Truth Social that Powell must resign or face legal action, according to Benzinga. He predicts a final bill of $3.5 to $4 billion and claims he could have completed the work for $25 million. He also asked Attorney General Todd Blanche to review the report.

Jerome Powell, whose term as governor runs until January 2028, had not made any public statements noted at the time of writing. He had said he wanted to remain on the board until the investigations were closed. The Justice Department's investigation, opened in January 2026, was closed in April, according to Axios.

Can a Fed Governor Be Forced to Leave? What the Law Says

The law allows for the removal of a governor only < < for cause > >. On June 29, 2026, in the case of Trump v. Lisa Cook, the Supreme Court upheld, by a vote of 5 to 4, the injunction blocking the removal of this governor. Chief Justice John Roberts wrote the decision, which deemed the removal < < erroneous and void > > due to lack of procedure, according to CNBC.

According to an analysis by the Brookings Institution, the Court requires a substantial reason, related to the severity of the misconduct and its connection to the governor's duties. It would also check if the reason serves as a pretext to influence monetary policy. The majority explicitly cites the appearance of the Fed's independence.

Cook was entitled to an explanation of the grounds for her removal, a means to respond, and a timeframe. Nothing at this stage indicates that such a procedure is aimed at Powell: Trump is demanding a resignation and a review by the Justice Department. A reason drawn from a report that dismisses any criminal misconduct might struggle to pass this test, but no court has ruled on the Powell case.

Rates, Bitcoin, and Fed Independence: What Markets Say

The August PCE, the Fed's preferred inflation index, came out on September 30 at 3.4% year-on-year (3.7% expected) and 3.0% excluding energy and food (3.3% expected). After this release, the CME FedWatch tool gave a 37% chance of a 25 basis point hike in October, compared to 62% for a status quo, according to Decrypt.

The yield on the ten-year U.S. Treasury, the rate at which the government borrows, hovered around 5.25%, among its highest in nearly twenty years according to the same source. Bitcoin hit $85,599 before returning to $84,376 during that session.

These readings date from September 30 and do not measure the reaction to Trump’s call: no numerical data at this stage allows attributing a movement in rates, the dollar, or bitcoin to this message. The debate on the independence of the Fed is opening up in a bond market already tense, and a Supreme Court that upheld Lisa Cook in her position by five votes to four on June 29.

For details on the inflation data that weighs on these expectations, read our analysis of the August PCE. According to the inspector general, the project is expected to be completed in December 2027, a month before Jerome Powell's governorship ends in January 2028.

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