"The president and his team will continue to study that matter," Hassett said at the White House when a reporter asked if "firing Jay Powell is an option in a way that it wasn't before," Kevin Hassett said on Friday.
Hassett's remarks came a day after Trump ramped up a long-simmering feud with the Fed chair, accusing Powell of "playing politics" by not cutting interest rates and asserting he had the power to evict Powell from his job "real fast".
Trump doubled down on his criticism of Powell on Friday, telling reporters during an Oval Office event: "If we had a Fed chairman that understood what he was doing, interest rates would be coming down. He should bring them down."
Powell has said that the law would not allow his removal, that he would not leave if asked to by Trump, and that he intends to serve through the end of his term as chair in May 2026. Powell, whose term as a member of the Fed's Board of Governors extends through January 2028, also said this week he does not think the current case on appeal at the US high court will apply to the Fed.
Powell, first appointed to the Fed by Barack Obama, was elevated to Fed chair by Trump during his first term, but the Republican president soon soured on him for raising interest rates. Trump repeatedly berated Powell in public and considered trying to fire him but never did.
The issue has arisen again in the last week with Powell and other Fed officials saying they believe Trump's aggressive tariffs could put them in a bind with the potential for them to push up inflation while harming overall economic growth and labour markets. Trump on Thursday chastised Powell again for not cutting rates.
"The Fed really owes it to the American people to get interest rates down. That's the only thing he's good for," Trump said.
"I am not happy with him. If I want him out of there he'll be out real fast believe me."
Hassett said Trump's policies were boosting capital spending and job creation was increasing, while inflation was declining.
Economists and investors have been following the escalation with trepidation. The Fed's credibility as the world's most powerful central bank rests largely on its historic independence to act free from political influence, and an effort to remove Powell could further roil markets already battered for weeks by Trump's erratic approach to imposing his new tariffs, with the rollout beset by a mix of delays, partial rollbacks and escalations, with China in particular.
