Fed chair pushes back on Trump criticism of renovation costs as president presses central bank to cut interest rates…reports Asian Lite News
Donald Trump sparred with the Federal Reserve chair, Jerome Powell, on Thursday during a rare presidential visit to the central bank’s headquarters.
Trump was continuing his campaign to pressure the Fed to cut interest rates and was visiting its Washington headquarters to view costly renovations he has suggested are tantamount to fraud.
Having branded Powell a “numbskull” for the Fed’s recent decisions not to cut rates, Trump has turned up the pressure on Powell with criticism of the $2.5bn bill for renovating the Fed’s historical buildings.
Powell and Trump stood in hard hats inside the Fed’s construction site. Urging the Fed chair to stand closer to him, Trump alleged that the bill for the renovations would now cost $3.1bn.
“It looks like it’s about $3.1bn – it went up a little bit or a lot,” said Trump. The usually unflappable Powell looked visibly irritated, closed his eyes and shook his head. “I am not aware of that,” said Powell.
Handed a piece of paper by Trump, Powell scanned it and said the new figure included the cost of renovations for the Martin Building, a different Fed office that was renovated five years ago. “It’s not new,” said Powell.
Asked by a reporter what he would do if a project manager went over budget, Trump said: “I’d fire him. “Look, I would love to see it completed,” Trump said. “I don’t want to put that in this category.”
The president backed away from earlier statements in which he had suggested he would fire Powell, a suggestion that has rattled stock markets. Trump said: “To do that is a big move, and I just don’t think it’s necessary, and I believe he’s going to do the right thing.”
The visit to the Fed comes less than a week before the central bank’s 19 policymakers gather for a two-day rate-setting meeting, where they are widely expected to leave the central bank’s benchmark interest rate in the 4.25%-4.50% range.
Trump has demanded that the Fed lower rates by three percentage points. Trump has repeatedly demanded that Powell slash US interest rates and has frequently raised the possibility of firing him.
Ahead of Trump’s visit, Fed staff escorted a small group of reporters around the construction sites. They wove around cement mixers and construction machines, and spoke over the sound of drills, banging and saws.
Fed staff pointed out security features, including blast-resistant windows, that they said were a significant driver of costs, in addition to tariffs and escalations in material and labor costs.
Trump said before arriving that he would be joined by Republican Sens. Tim Scott and Thom Tillis, as well as a handful of administration officials, including Federal Housing Finance Agency Director Bill Pulte.
Trump had been demanding that Powell immediately lower the benchmark interest rate while berating him with accusations of incompetence and political bias — even though it was Trump who originally nominated Powell for the role in 2017.
The key interest rate sets what banks charge each other for overnight lending, but also spills over into multiple consumer products. The Fed lopped a full percentage point off that rate in the back half of 2024, taking it to a range of 4.25%-4.5%. But it has kept the rates steady since December — infuriating Trump, who claims that slashing rates will save the U.S. hundreds of billions of dollars in interest costs.
Trump has tried to brand Powell with the nickname “Too Late.” And last week, he asked a room full of House Republicans if they thought he should fire the Fed chair.
But Trump later backed off, saying it was “highly unlikely” that he would terminate Powell, “unless he has to leave for fraud.” It is unclear whether the president has the authority to fire a Fed chairman. The Supreme Court recently indicated in a ruling that the central bank’s independence is protected by legal precedent.
But Trump and his administration have kept up the pressure, most recently by targeting costs related to the Fed renovation. Trump’s budget chief, Russ Vought, earlier this month alleged that Powell “has grossly mismanaged the Fed” as he questioned the “ostentatious” construction project.
