Trump visits Federal Reserve, spars on camera with Powell but without firing threat

President Donald Trump publicly criticised Federal Reserve Chair Jerome Powell on Thursday for the soaring expenses of a long-planned construction project, taking the battle to the Fed’s front door after months of criticism. Powell resisted, arguing that the president’s most recent price tag was inaccurate.

Trump and Powell stood in the centre of the work site, grim-faced and wearing hard hats, and spoke to the gathered television cameras. In contrast to the Fed’s $2.5 billion estimate, Trump claimed that the renovation would cost $3.1 billion. He was accompanied by Powell, who shook his head.

After reviewing a document that Trump had given him, the Fed chair stated that the president was factoring in the expense of remodelling the Martin building, a different Fed facility that was completed five years prior.

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The president’s pressure on Powell to cut borrowing costs, which Trump claims would boost economic growth and cut down on interest payments to the government, was significantly increased during the visit. Despite being only a few streets from the White House, presidents hardly ever visit the Fed’s offices, demonstrating the central bank’s detachment from daily politics.

“We have to get the interest rates down,” Trump said later after a short tour, addressing the cameras this time without Powell. “People are pretty much unable to buy houses.”

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Trump is likely to be disappointed next week, however, when Fed officials will meet to decide its next steps on interest rates. Powell and other officials have signaled they will likely keep their key rate unchanged at about 4.3%. However, economists and Wall Street investors expect the Fed may start cutting rates in September.

The Federal Reserve sets a short-term interest rate that influences other borrowing costs, such as mortgages, auto loans and credit card rates. Yet the Fed doesn’t directly control those other rates, which are ultimately set in financial markets. Last September, when the Fed cut its rate a half-point, mortgage rates actually rose in response.

Trump did step back a bit from some of his recent threats to fire Powell before his term ends May 26. Asked if the rising costs of the Fed’s renovation, estimated in 2022 to cost $1.9 billion, was a “fireable offense,” Trump said, “I don’t want to put this in that category.”

“To do that is a big move, and I don’t think that’s necessary,” Trump added. “I just want to see one thing happen, very simple: Interest rates come down.”

And on his Truth Social site, Trump said, “The cost overruns are substantial but, on the positive side, our Country is doing very well and can afford just about anything — Even the cost of this building!”

The Fed allowed reporters to tour the building before the visit by Trump, who, in his real estate career, bragged about his own lavish spending on architectural accoutrements that gave a Versailles-like golden flair to his buildings.