Kevin Hassett, President Donald Trump’s chief economic adviser, has called on Jerome Powell to step down from the Federal Reserve’s Board of Governors in the wake of an inspector general review concerning the renovation of the central bank’s headquarters. Although Powell finished his term as chair in May, he continues to cast votes on interest rates. Should he leave, a vacancy would be created for a candidate chosen by Trump.
Powell Retains a Vote on Interest Rates
Kevin Hassett voiced his position during an Oct. 4 appearance on Fox News’ Sunday Morning Futures, tying his demand to concerns over how the central bank managed the construction project and asserting that Powell ought to resign.
“I think that it’s time for him to move on and to respect the independence of the Fed,” Hassett stated. Concurrently, Trump issued his own call for Powell to resign following the publication of the watchdog’s report.
While Kevin Warsh succeeded Powell as Fed chair in May, Powell kept his position as a member of the Board of Governors. According to the Fed, he remains one of the 12 voting participants on the Federal Open Market Committee. These governors vote alongside the president of the New York Fed and four rotating regional bank presidents.
Should Powell choose to step down prior to the expiration of his governor term in 2028, Trump would have the opportunity to put forward a replacement subject to confirmation by the Senate. Any newly appointed governor would wield a single vote on the committee, meaning broader policy choices will continue to hinge on the collective evaluation of employment and inflation data by the entire group.
Bitcoin’s Outlook Depends on the Rate Path
On Sept. 16, the Fed raised its benchmark interest rate by 25 basis points, bringing it to a target bracket of 3.75% to 4%. The move received unanimous backing from all 12 committee participants, including both Powell and Warsh.
An exit by Powell would not automatically result in reduced borrowing costs or inject liquidity into financial markets. Any potential benefit for Bitcoin relies entirely on whether a successor advocates for a looser monetary stance and whether market participants alter their forecasts for forthcoming interest rates.
At the same time, predictions pointing toward another rate hike in October have lost momentum even without any alterations to the panel’s roster. Fed Vice Chairman Philip Jefferson noted that policymakers might require additional time to evaluate economic conditions. Similarly, New York Fed President John Williams suggested that while further tightening could become appropriate, immediate action is not required.
Expectations for a temporary halt were further reinforced by a September jobs report that fell short of forecasts. Even so, a rate increase remains a possibility for December, and upcoming inflation data have the capacity to alter projections ahead of the October gathering.
October Meeting Approaches as Renovation Review Continues
The upcoming policy session for the Fed is scheduled for Oct. 27–28. How Bitcoin reacts will rely in part on the interest rate verdict and guidance from officials regarding subsequent policy adjustments. Additionally, Treasury yields continue to play a role by providing investors with competing avenues for returns through government debt.
The evaluation of the renovation uncovered administrative shortcomings, such as deficiencies in managing expenses, though it found no proof of criminal activity or administrative wrongdoing. On Friday, the Justice Department announced that these discoveries did not warrant reviving a criminal inquiry into Powell.
Attorney General Todd Blanche indicated that authorities could initiate an investigation if an independent audit brings to light any evidence pointing to criminal behavior. In response, Warsh has instituted tighter supervision over the building project, which includes assistance from the General Services Administration alongside an external auditor tasked with assessing expenditures.
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