Trump Pressures Fed Chair Powell Over 3B Renovation Overruns, Seeks Rate Cuts

President Donald Trump publicly challenged Federal Reserve Chair Jerome Powell during a recent visit to the Fed’s Washington headquarters, focusing on the central bank’s ongoing $2.5 billion renovation project and its monetary policy stance. The encounter, marked by heightened political tension, highlighted Trump’s frustration over rising costs and delayed timelines for the project, which has ballooned from an initial $1.9 billion estimate. Trump, who toured the renovation site, cited a figure exceeding $3 billion, prompting Powell to clarify that the figure included a third building renovated years earlier [1]. Powell emphasized that the current project, set for completion in 2027, involves upgrading two historic buildings—the Marriner S. Eccles and Constitution Avenue structures—due to aging infrastructure, security needs, and regulatory compliance.

The renovation, delayed by supply chain disruptions, inflation, and elevated labor costs, now includes blast-resistant windows and structural reinforcements. Despite scaled-back plans to curb expenses, completion has been pushed to 2027, with full occupancy expected in early 2028. Trump seized on the project’s overruns to critique Powell’s leadership, with the White House’s Budget Director, Russell Vought, accusing the Fed of violating oversight protocols. Powell denied any wrongdoing, asserting the Fed’s independent budget and voluntary compliance with external reviews.

During the visit, Trump openly called on Powell to lower interest rates, a demand the Fed has resisted amid economic uncertainties linked to trade tariffs and inflation. “I’d love for him to lower interest rates,” Trump told reporters, standing beside Powell [1]. The Fed has maintained that rate decisions depend on data-driven assessments of inflation and employment, not political pressure. Trump’s administration has repeatedly framed the renovation’s cost overruns as evidence of poor management, with some officials suggesting it could justify Powell’s removal.

The Fed’s inspector general has initiated a second review of the project to ensure adherence to oversight rules, while Powell defended the complexity of modernizing century-old buildings. He noted the need for hazardous material removal and infrastructure replacement, factors that contribute to the project’s scope and costs. The central bank emphasized its autonomy in budgetary and operational decisions, distinguishing its governance from federal agencies like the National Capital Planning Commission.

Political pressure on the Fed to adjust monetary policy remains a focal point of the Trump-Powell dynamic, with the president leveraging public appearances to advocate for rate cuts. Analysts observe that such interventions, while common in U.S. politics, may not sway the Fed’s decisions, which prioritize long-term economic stability over short-term political goals. The renovation project, meanwhile, underscores the challenges of balancing historical preservation with modern security and infrastructure demands in a high-cost environment.

Source: [1] [Trump Pressures Fed Chair Powell Over Costly Renovation and Interest Rates] [https://coinedition.com/trump-pressures-fed-chair-powell-over-costly-renovation-and-interest-rates/]