Trump Pressures Powell Over Interest Rates, Fed Building Costs

Donald Trump has once again criticized Federal Reserve Chair Jerome Powell, this time for his stance on interest rates. In a post on Truth Social, Trump accused Powell of disrespecting America’s financial strength and urged him to lower interest rates. Trump’s post came shortly after his budget chief, Russell Vought, sent a letter to Powell criticizing his handling of a construction project at the Fed’s headquarters.

Vought, who now heads the Office of Management and Budget, accused Powell of mismanaging the Fed and possibly misleading lawmakers in Congress. The letter highlighted the spiraling costs of the Fed’s Washington building renovation, which Vought claimed is now $2.5 billion—about $700 million more than its original price tag. Vought described the project as “ostentatious” and claimed the cost per square foot has hit $1,923, a number he said is twice the usual rate for historic federal buildings.

Vought’s letter was a response to Powell’s recent testimony to the Senate Banking Committee, where Powell denied that the building included any luxurious features. Vought, however, claimed that the original design plans did call for rooftop gardens, elevators, private dining areas, and luxury finishes. He also raised legal issues, suggesting that the project may be in violation of the National Capital Planning Act, which requires the National Capital Planning Commission to approve major federal projects.

Vought demanded that Powell answer 11 questions about the project within seven business days. Trump’s administration hasn’t said whether they’ll try to remove Powell, but the pressure is mounting. In the past, Trump considered firing him and even floated replacing him publicly before his term ends next spring. Now that Trump’s back in power, the idea may not stay off the table much longer.

Two days before his Truth Social post about interest rates, Trump posted that a Council of Economic Advisers (CEA) study proves Powell has been wrong all along about inflation. Trump wrote that the study, led by Highly Respected Chair, Dr. Stephen Miran, found that tariffs have had zero impact on inflation. He also claimed that the study shows that import prices are actually dropping, contrary to what Powell has been saying. Trump urged Powell to cut interest rates, arguing that now is the time to do so.

There’s also a legal wall Trump may want to break through. The Supreme Court recently ruled that Fed board members are protected from being removed by the president without cause. But if Vought’s accusations stick—about mismanagement, lies to Congress, or violations of federal law—Trump may try to argue that Powell’s actions meet that threshold. For now, Powell hasn’t replied publicly to Vought’s letter or Trump’s posts, as per usual. But the clock is ticking on those 11 questions.