Trump visits the Federal Reserve in escalation of pressure campaign

President Donald Trump took his criticism of Federal Reserve Chief Jerome H. Powell directly to the central bank chief Thursday afternoon, an unusual escalation of the White House’s stinging critiques of cost overruns in renovating the historic buildings that house the Fed and, more broadly, the Fed’s refusal to lower borrowing costs.

The President’s personal attention to the $2.5 billion renovation of two historic buildings designated as part of the Federal Reserve’s headquarters comes as Trump has expressed broader frustration about the independent central bank.

“It looks like it’s about 3.1 billion. It went up a little bit. Or a lot,” Trump said during the tour, after asking Powell to stand closer to him, and in full view of the cameras, as he talked about cost overruns on live television.

Then Trump and Powell went back and forth about whether the cost had actually ballooned to $3.1 billion. Trump pulled a piece of paper from his pocket and handed it to Powell to prove his point. And Powell said the number the president provided was inflated because it included the costs of a third building reopened in 2021.

Shortly after, a reporter asked the president what he would do with a contractor who had overshot his budget. “Generally speaking, what I would do? I’d fire him,” Trump said, before adding that he didn’t want to make the visit personal.

As provocative as Trump’s visit appeared – the first time in nearly 20 years that a sitting president had visited the Fed – the president refused to call for Powell to resign or signal any plans to try to fire him. “To do that is a big move and I just don’t think it’s necessary,” Trump said. “I believe that he’s going to do the right thing” and lower rates.

At several points this week, Trump has also sought to divert attention away from his own political struggles facing pressure to release Justice Department files concerning the disgraced financier Jeffrey Epstein, who died in 2019.

Trump has targeted Powell relentlessly for weeks, accusing the Fed chair of acting to benefit Trump’s political enemies and contributing to higher costs for everything from the price of a home mortgage to payments on the national debt.

Despite the pressure, the Fed is expected to hold interest rates steady at its scheduled policy meeting next week. Top Fed officials are already gravitating toward more rate cuts, possibly as soon as September, after pausing to assess how Trump’s trade and other policies weigh on the economy.

While White House officials have signaled displeasure with Powell they also have suggested they have no plans to take the unprecedented step of seeking to fire Powell. Fed watchers characterized the administration’s criticism over the extensive renovations as a move to lay the groundwork for a potential “for cause” removal.

Asked by a reporter earlier this month if the high price tag could be grounds for removal, Trump said: “I think it sort of is.” The following day, Trump told reporters he wasn’t planning to dismiss Powell “unless he has to leave for fraud.”

In pushing for lower rates, the president has stressed that other major economies, particularly in Europe, have lowered interest rates several times while the United States has paused cuts since late last year. He has also lamented that mortgage costs are too high, which he blamed on Powell. “Our economy is so strong now, we’re blowing through everything, we’re setting records. People aren’t able to buy a house because this guy is a numbskull, he keeps the rates too high, and probably is doing it for political reasons,” he said at an event with President Ferdinand Marcos Jr. of the Philippines on Tuesday.

On Thursday, Trump said he and Powell had a productive meeting and that he communicated to the Fed chair the progress the country had made in the past six months.

“We should have the lowest interest rate. And if you took it down three points, not a little bit, but three points … we would save more than $1 trillion. Basically, with just a paper transfer, you wouldn’t be cutting costs of anything. You wouldn’t be building anything, just a move of the hand saying we’re can lower interest rates. You would save $1 trillion a year.”

Congress built the Fed to operate independently, shielding it from political pressure to hold down interest rates that could juice the economy in the short term but help fuel longer-term inflation. Once Fed officials are confirmed, the president doesn’t have direct sway over the Fed, which decides on its own whether to help stimulate the economy or tap the brakes if the economy is heating up too quickly.

The U.S. Supreme Court recently signaled that a top Fed official could only be removed “for cause,” meaning some type of malfeasance, rather than a policy dispute over interest rates.

Though the Trump administration has generally sought to apply daily pressure on Powell, in television interviews or social media messages, some officials have been more measured. Treasury Secretary Scott Bessent said earlier this week that Trump isn’t planning to oust Powell, whom he described as a dedicated public servant.

Powell has given no indication he plans to leave early and is expected to fight any effort to oust him. His term as chairman comes to an end in May but he can remain on the Fed board as one of seven governors until 2028.

Trump’s outrage over the Fed renovation costs is inconsistent with his past positions. On the 2016 campaign trail, he claimed a border wall with Mexico would cost about $10 billion and that Mexico would foot the bill. In reality, Trump got roughly $17 billion for wall construction during his first term, with Congress appropriating another $46.5 billion this year.

Still, the options aren’t great for the Powell and the Fed.

If they cut rates now, they look like they’re capitulating to pressure from Trump. And if they keep rates unchanged, the attacks could succeed in undermining Powell’s public reputation. Indeed, a White House official said last week that their goal in highlighting the costly renovations was, in part, “to damage this guy’s image,” according to Politico.

The political environment is now more hostile to Powell and the central bank, with at least four Senate Republicans calling for the longtime Fed leader to resign. While congressional Republicans generally defended Powell against Trump’s attacks during the president’s first term in office, many of Powell’s top defenders have retired.

The Fed’s building project isn’t new and the cost overruns have been a problem for years, in part the result of expansive work underground in an area along the National Mall that used to be a swamp. Other factors inflated the costs, the Fed said, such as pandemic-era inflation for building materials and more mundane aspects of the project, such as asbestos removal, along with toxic contamination in soil and a higher-than-expected water table, the Fed said on its website.

In a three-page letter to White House Office of Management and Budget Director Russell Vought, Powell said last week that the project was large in scope because it involves the renovation of two historic buildings that were first constructed in the 1930s but hadn’t seen a comprehensive renovation since they were first constructed.

Vought joined Thursday’s tour of the Fed buildings along with James Blair, a White House deputy chief of staff, and Bill Pulte, a housing-finance regulator who has been an outspoken critic of Powell.

Sen. Tim Scott of South Carolina, the GOP chairman of the Senate Banking Committee that oversees that Fed, also joined the tour. Scott sent a pointed letter to Powell Wednesday night, pressing for comprehensive explanations about the scope and oversight of the renovation project after Fed staffers briefed Scott’s committee staff on the project last week.

At the end of their remarks to reporters, someone asked the President what Powell could do to staunch the hydrant of criticism from the White House.

“Well, I’d love him to lower interest rates,” Trump said. “Other than that, what can I tell you.”