Trump Evaluates Move to Remove Three Fed Governors Amid Legal Complexities

President Donald Trump is considering actions to remove three members of the Federal Reserve Board, though legal experts warn that such moves face substantial judicial obstacles. This potential campaign follows a watchdog report released Wednesday that exonerated Federal Reserve Chair Jerome Powell of criminal wrongdoing regarding costly renovations to the Fed’s headquarters.

The report, issued by the Fed’s inspector general, identified managerial failures that contributed to approximately $1 billion in cost overruns but found no evidence of administrative misconduct or grounds for criminal referral. Despite these findings, Trump criticized Powell, telling reporters on Wednesday that the chair “is a disaster” and “should not be sitting on the Federal Reserve Board.”

Powell, who was appointed by Trump during his first term, has stated he will remain in his post through January 2028 to ensure the legal threat against him is resolved. In January, following subpoenas related to the renovation inquiry, Powell issued a statement describing the legal actions as pretexts.

Beyond Powell, the president has expressed grievances against Governors Lisa Cook and Michael Barr. The administration had previously attempted to remove Cook over allegations of mortgage fraud, but the Supreme Court blocked the move in June, ruling that she was owed due process. As of August, Cook received the required notice and opportunity to respond, yet the administration still must demonstrate “cause” for removal, likely necessitating another Supreme Court review.

Meanwhile, an external investigation into the Fed’s regulatory response to the 2023 collapse of Silicon Valley Bank has implicated the bank’s supervisors. Although the preliminary report by Starling Advisory Group did not assign personal responsibility to Barr, the White House has publicly blamed him for the episode.

Scott Alvarez, a former general counsel at the Fed, cautioned that pursuing removals could undermine Trump’s agenda. “All have an incentive to litigate and stay,” Alvarez said, noting that if the governors remain in place while lawsuits proceed, the president achieves little. He added that the renovation report alone would likely not persuade a court to remove Powell for cause.

Any legal battles could stretch on for months, potentially influencing the Fed’s upcoming interest-rate decision scheduled for Oct. 28, just days before the Nov. 3 midterm elections. The Cook case is currently pending before U.S. District Court Judge Jia Cobb, who has requested a joint status report by Nov. 6.

The Department of Justice has not yet responded to inquiries regarding its plans, while Attorney General Todd Blanche and U.S. Attorney Jeanine Pirro are reviewing the inspector general’s findings. Pirro’s office previously faced judicial pushback when a judge quashed subpoenas in her investigation of Powell, citing harassment.

In a recent interview with Time magazine, Trump also commented on the current leadership structure, stating that newly confirmed Fed Chairman Kevin Warsh is “controlled to a certain extent” by the board and criticizing Cook’s continued presence.