Jerome Powell disagrees with Trump about cost of changes to Fed construction
Washington — President Trump and Federal Reserve Chair Jerome Powell found themselves at odds as they visited the Federal Reserve’s headquarters in Washington to inspect a major renovation project on two of the reserve’s buildings. Last week, Trump hinted that Powell’s management of the project and its cost overruns could potentially lead to his dismissal. However, during their visit on Thursday, Trump stated that he does not believe firing Powell is necessary.
During the visit, Trump and Powell, both donning hard hats, stood side by side at the construction site. Trump asserted that costs had risen to $3.1 billion, to which Powell expressed surprise as he had not been informed of this figure by anyone at the Fed. Trump handed a document to Powell for review, leading to a discussion about the inclusion of the Martin building in the overall project, with Powell clarifying that the building had been completed five years ago.
After the tour, Trump described the project as “a very luxurious situation” and mentioned that completion was his priority. Despite the cost overruns, Trump emphasized that firing Powell was not on the table, citing the complexity of the project and expressing satisfaction with their relationship.
Trump’s ongoing criticism of Powell stems from the Fed’s decision to maintain the short-term interest rate at 4.3%, a move that Trump believes hampers economic growth. Powell, on the other hand, is cautious about reducing rates due to uncertainties surrounding the economy’s response to Trump’s tariffs, which could lead to inflation.
The renovation project, which has been ongoing for years, has faced challenges such as rising construction costs and the complexity of historic preservation requirements. Despite the escalating costs, the Fed remains committed to completing the project by 2027.
Renovations have been underway for years
The Fed’s renovation plans were approved in 2017 and have since undergone several rounds of approval from local commissions, including those with Trump appointees. Factors such as tariffs, inflation-driven material costs, and historic preservation needs have contributed to the project’s increased budget.
Trump’s consideration of firing Powell has raised concerns about the Fed’s independence and potential market implications. Despite Trump’s disparaging remarks about Powell, the Fed chair’s term is set to continue until 2026.
