Trump Attacks Powell Over Fed Reno, Revives Calls for His Dismissal

Trump Intensifies Attack on Powell Over Renovation Costs

Former U.S. President Donald Trump has stated that the Federal Reserve’s $2.5 billion renovation plan might be grounds to dismiss Federal Reserve Chairman Jerome Powell. This marks the latest in Trump's series of sharp criticisms against the central bank chief.

“I think he’s been terrible… but I never thought he’d spend $2.5 billion to expand the Fed,” Trump told reporters. He added that talking to Powell was like “talking to a chair” because of his perceived lack of personality.

When asked whether this constituted a dismissible offense, Trump replied, “I guess it does.”

Concerns Over Federal Reserve Independence

For months, Trump has sharply criticized Powell, demanding interest rate cuts. However, Fed officials have held interest rates steady this year, much to Trump's displeasure. These attacks have raised concerns about the independence of the data-driven Federal Reserve and the potential undermining of that independence.

Markets favor an independent central bank, where monetary policymakers set interest rates based on data and a clear mandate, rather than being swayed by political considerations from politicians.

“The Fed’s independence is critically important, not just for the current chair, who I respect, but the next chair as well,” JPMorgan Chase CEO Jamie Dimon told reporters on a conference call.

“Manipulating the Fed often has unintended consequences, and it's exactly the opposite of what you’re trying to achieve,” he added.

Fed Renovations as a New Point of Contention

Trump acknowledged that his increasingly personal pressure on Powell has not yielded the rate cuts he desired. The Fed's renovation plan has become a new target for his recent attacks on Powell.

Powell had previously requested the Fed’s inspector general conduct an additional review of the ongoing project. Last month, some senators questioned Powell about the “lavish renovation” of the Fed’s Washington headquarters during a semi-annual monetary policy hearing.

According to information from the Fed’s website, the renovation project was approved by the Federal Reserve Board of Governors in 2017, with an initial budget of $1.9 billion in 2019, and work began in 2021. But costs ballooned to $2.5 billion due to “unforeseen conditions” (such as “higher-than-expected asbestos content, toxic soil contamination, and higher-than-expected water tables”).

Trump's Ongoing Criticism of Powell

Trump’s criticisms of Powell have long been public, calling him a “dummy,” “idiot,” and more. Powell has publicly stated that without the impact of tariffs, the Fed would have already cut interest rates this year, and that officials are waiting to observe the impact of tariffs before deciding whether to cut.

Trump remains unconvinced. “Our interest rates should be at 1%,” he said Monday at a luncheon. “They should even be less than 1%.”