Trump Aide Hassett Says Powell Should ‘Move On’ From Fed Board

(Bloomberg) -- President Donald Trump's chief economic adviser called on former Federal Reserve Chair Jerome Powell to leave the central bank's board after an internal report cited management failures in the renovation of its headquarters.

"I think that it's time for him to move on and to respect the independence of the Fed," Kevin Hassett, head of the National Economic Council at the White House, said on Fox News' Sunday Morning Futures when asked whether Powell should resign.

The Fed's internal watchdog said in a Sept. 30 report it found no evidence of criminal wrongdoing and didn't identify any "administrative misconduct" connected to the $2.4 billion renovation project in Washington, but cited management deficiencies that helped almost double the project's original cost.

Trump responded with a social post saying Powell, whom he relentlessly pressured to lower interest rates as Fed chair, "should be forced to resign from the Board."

US Attorney General Todd Blanche, whom Trump has asked to review the Fed inspector general's report, said in an interview Friday that the Justice Department wouldn't reopen a criminal investigation of Powell based on the findings.

The Fed has said it will engage an independent auditor to scrutinize the building costs. Blanche added that if that review finds any evidence of criminal wrongdoing, the Justice Department could investigate.

"I expect there will be an auditing process," Blanche said. "If they learn anything that rises to any kind of criminal misconduct, you better believe we're going to investigate that."

Powell has been on the Fed's board of governors since leaving his position as chair in May, breaking with the precedent of Fed chairs' leaving the central bank when their leadership term ends.

Powell has said that threats of criminal investigations into him and the Federal Reserve left him with no option but to stay, a stance that Trump and other members of his administration condemned.

While Trump has long pressed the Fed to lower borrowing costs, policymakers under Chairman Kevin Warsh last month voted unanimously to raise interest rates by a quarter percentage point in the face of stubborn inflation.

"As you saw, that Chairman Warsh voted with people to increase interest rates," Hassett told Fox News. "I disagree with that decision, but we respect that he was doing that for the right reasons."