[WASHINGTON] Donald Trump and US Federal Reserve chairman Jerome Powell appeared together for a tense meeting on Thursday as the president toured the central bank after ramping up his attacks on its management of the economy.
Trump – who wants to oust Powell for refusing to lower interest rates but likely lacks the legal authority to do so – has threatened to fire the Fed chief over cost overruns for a renovation of its Washington headquarters.
During a brief but painfully awkward exchange in front of reporters during a tour of the building, the pair bickered over the price tag for the makeover, which Trump said was US$3.1 billion.
The actual cost of the facelift has been put at US$2.5 billion and Powell was quick to correct the president, telling him: “I haven’t heard that from anybody.”
Trump produced a sheet of paper apparently listing construction costs and was told curtly that he was including work on the William McChesney Martin Jr. Building, which was not part of the project.
“You’re including the Martin renovation – you just added in a third building,” Powell scolded.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Trump stuck to his guns, saying it was part of the overall redevelopment. Powell shot back: “No, it was built five years ago. We finished Martin five years ago… It’s not new.”
Trump moved on but the tense atmosphere between the pair was almost palpable, with the Republican leader unaccustomed to being contradicted live on air.
The tour came with Trump desperate to shift the focus away from the crisis engulfing his administration over its decision to close the file on multi-millionaire sex offender Jeffrey Epstein, who died in 2019 while awaiting trial on trafficking charges.
Attorney General Pam Bondi informed the president in the spring that his name appeared in the Epstein files, according to the Wall Street Journal.
Epstein was accused of procuring underage girls for sex with his circle of wealthy, high-profile associates when he died by suicide in a New York jail cell.
Trump has picked all manner of targets, including his Democratic predecessors and former chiefs of the security and intelligence services, as he tries to move Epstein out of the headlines.
He berated Powell over interest rates on Wednesday, and alluded to his annoyance over the cost of borrowing more than 10 times during Thursday’s tour.
“As good as we’re doing, we’d do better if we had lower interest rates,” he told reporters.
‘Do the right thing’
Presidential visits to the Federal Reserve are not unheard of – Franklin D. Roosevelt, Gerald Ford and George W. Bush all made the trip – but they are rare.
Trump has criticised Powell for months over his insistence on keeping the short-term interest rate at 4.3 per cent this year, after cutting it three times last year, when Joe Biden was in office.
Powell says he is monitoring the response of the economy to Trump’s dizzying array of import tariffs, which he has warned could lead to a hike in inflation.
But Trump has angrily accused Powell of holding back the economy, calling the man he nominated in his first term “stupid” and a “loser.”
The president struck a more conciliatory tone later on Thursday, telling reporters they’d had a “productive talk” on the economy, with “no tension.”
“It may be a little too late, as the expression goes, but I believe he’s going to do the right thing,” Trump said.
Soaring costs for the Fed’s facelift of its 88-year-old Washington headquarters and a neighboring building – up by US$600 million from an initial US$1.9 billion estimate – have caught Trump’s eye.
A significant driver of the cost is security, including blast-resistant windows and measures to prevent the building from collapsing in the event of an explosion.
The Federal Reserve, the world’s most important central bank, makes independent monetary policy decisions and its board members typically serve under both Republican and Democratic presidents.
Experts question whether Trump has the authority to fire Powell, especially since a Supreme Court opinion in May that allowed the president to remove other independent agency members but suggested that this did not apply to the Fed. AFP
