Powell challenges Trump's $3.1B Fed renovation claim during tour

Federal Reserve Chair Jerome Powell publicly challenged President Donald Trump’s claim that the cost of renovations at the central bank had exceeded $3.1 billion during a guided tour of the Fed’s Washington headquarters on Thursday. Standing in a hard hat alongside Trump, Powell told reporters, “That’s not true. I haven’t heard that from anybody,” while clarifying that the figure included a separate federal building completed five years prior [1]. Trump responded by stating, “So we’re going to take a look. We’re going to see what’s happening, and it’s got a long way,” signaling his intent to scrutinize the matter further [1]. The exchange unfolded amid Trump’s broader pressure on Powell to lower interest rates or resign from his position, a campaign that has intensified in recent months.

The confrontation marked an unusual moment in U.S. political and economic history: a sitting president faced direct rebuttal from the Fed chair he appointed in 2017. This public challenge to Trump’s assertion underscored the tension between political figures and the central bank’s institutional independence. Powell’s firm denial of the $3.1 billion claim, delivered in a measured tone, reinforced the Fed’s role as a guardian of economic data accuracy. Analysts note that such direct interventions are rare for central bankers, who typically avoid public disputes with elected officials to preserve their policy credibility [2].

Trump’s push for rate cuts has been a recurring theme in his public statements, with the president arguing that reducing borrowing costs could save the U.S. “hundreds of billions” in interest payments as national debt interest reached $1.1 trillion in 2024. However, Powell has maintained that current economic conditions do not justify rate reductions, opting instead to keep the benchmark rate unchanged. The renovation claim appears to be another lever in Trump’s strategy to pressure the Fed, though it lacks independent verification. The absence of corroborating evidence for the $3.1 billion figure leaves it vulnerable to rebuttal, as Powell’s response highlighted [1].

The episode also illuminated internal divisions within Trump’s administration. Billy Pulte, head of the Federal Housing Finance Agency, had earlier called for Powell’s resignation on social media, amplifying calls for the Fed chair’s removal. However, legal experts caution that replacing Powell would be challenging due to recent Supreme Court rulings reinforcing the Fed’s autonomy. When asked if the renovation issues constituted a “fireable offense,” Trump demurred, stating, “I would love to see it completed,” while insisting that the broader issue was not a matter of accountability [1].

Treasury Secretary Scott Bessent added to the scrutiny, expressing confusion over the renovation costs and advocating for an “internal review” of the Fed’s operations. Bessent’s comments aligned with Trump’s narrative, framing the central bank as an “unaccountable agency” engaging in “central planning.” Yet, Powell’s steadfast refusal to lower rates this year has positioned the Fed as a counterweight to political pressures, emphasizing data-driven decision-making over political expediency [2].

The incident underscores the delicate balance between political influence and institutional independence in economic governance. While the Fed has no official mandate to verify non-financial claims like Trump’s renovation figure, Powell’s public correction served as a strategic reaffirmation of the central bank’s authority. By dismissing the claim with a blend of firmness and composure, Powell not only defended the Fed’s credibility but also signaled to market participants and policymakers that the institution would not yield to external pressures.

This episode is likely to influence perceptions of economic discourse in a polarized political climate. As Trump continues to amplify his critiques of the Fed, Powell’s approach—balancing collegiality with unwavering commitment to data—positions the central bank as a neutral arbiter amid partisan tensions. The $3.1 billion claim, now publicly discredited, may fade from prominence, but the broader struggle over monetary policy independence remains a defining issue for U.S. economic governance.

Source: [1] [title1: "Jerome Powell publicly contradicted Donald Trump’s $3.1B renovation claim during a Fed tour"] [url1: https://coinmarketcap.com/community/articles/6882a4a52eb2b36094751916/] [2] [title2: "Jerome Powell publicly contradicted Donald Trump's $3.1B ..."] [url2: https://www.mitrade.com/insights/news/live-news/article-3-985481-20250725]