Tensions Escalate Between Trump and Fed Chair Powell Over Interest Rates and Renovation Costs
In a series of recent confrontations, U.S. President Donald Trump has escalated criticism of Jerome H. Powell, the Federal Reserve chair, over the management of the economy and the cost of renovating the central bank’s headquarters. Trump's administration and top aides, including Housing and Urban Development Secretary Scott Turner, have joined him in criticizing Powell, blaming high interest rates and extravagant spending on renovations at the Fed's headquarters for exacerbating the housing crisis.
Renewed Attacks on Powell
Trump has accused Powell of keeping U.S. interest rates excessively high and making it difficult for people, particularly the younger generation, to afford housing. The U.S. president referred to Powell as a numbskull
and suggested that his tenure at the Fed would soon end. Trump's intense criticism has prompted questions about the possibility of Powell's removal, although legal constraints make such a move unlikely.
Heated Exchange Over Renovation Costs
The discord between Trump and Powell was on full display during the president's rare visit to the Federal Reserve's headquarters, where they discussed the renovation project. Trump used the opportunity to express his disapproval of the project, which he equates with fraud due to its high cost. In the awkward exchange, Trump joked about wanting Powell to lower interest rates. However, Powell pushed back, asserting that Trump was wrong about the renovation costs.
The Fallout
The fallout from the tensions has thrown the National Capital Planning Commission, a little-known planning board, into scrutiny. It has become pivotal in the administration's campaign to discredit Powell. Furthermore, Scott Turner, Trump's housing chief, has criticized Powell for spending billions on the Fed facelift during a housing crisis, which Turner claims Powell is helping perpetuate.
The Aftermath
Despite the ongoing feud, Trump said it was not necessary
to fire Powell after getting a tour of the renovation project. The visit, which came days before the Fed's two-day policy meeting where the central bank sets rates, put Trump alongside the central bank chief he regularly criticizes.
In the end, the conflict between Trump and Powell highlights the growing tension between the White House and the Federal Reserve—an institution that prides itself on its independence. With Trump advocating for lower interest rates while criticizing the Fed's operational decisions, the consequences of this discord could impact the U.S. economy and its housing market. As the situation continues to unfold, it remains to be seen how Powell and the central bank will navigate these mounting pressures.