Trump will visit Federal Reserve in escalation of campaign to pressure Powell to cut interest rates
Trump will visit Federal Reserve in escalation of campaign to pressure Powell to cut interest rates
By CHRIS MEGERIAN, Associated Press
WASHINGTON (AP) — President Donald Trump plans to step foot in the Federal Reserve on Thursday as his allies scrutinize its expensive building renovations, a highly personal and confrontational escalation of his campaign to pressure the central bank to slash interest rates.
Trump administration officials have used concerns about the building overhaul to cast doubt on Fed Chairman Jerome Powell’s decision making. They were scheduled to inspect the site on Thursday, and the White House announced late Wednesday that the Republican president would also be visiting.
The visit reflects Trump’s disregard for the traditional independence of the Fed, which plays a foundational role in the American economy by setting monetary policy that is supposed to be free of political influence.
While previous presidents have criticized the Fed’s decisions, Trump’s sustained campaign is an unusual and, his critics say, dangerous departure from the norm. He has called on Powell to resign, insulted him repeatedly and suggested that he could be fired.
Ousting Powell could be illegal, and it would send shockwaves through global markets, potentially having the opposite effect that Trump wants as he pushes for lowering borrowing costs.
Trump has criticized Powell for months because the chair has kept the short-term interest rate the Fed controls at 4.3% this year, after cutting it three times last year. Powell says the Fed wants to see how the economy responds to Trump’s sweeping tariffs on imports, which Powell says could push up inflation.
Powell’s caution has infuriated Trump, who has demanded the Fed cut borrowing costs to spur the economy and reduce the interest rates the federal government pays on its debt.
The Fed has been renovating its Washington headquarters and a neighboring building. With some of the construction occurring underground and as building materials have soared in price after inflation spiked in 2021 and 2022, the estimated cost has ballooned from $1.9 billion to about $2.5 billion.
When asked last week if the costly rebuilding could be grounds to fire Powell, Trump said, “I think it sort of is.”
“When you spend $2.5 billion on, really, a renovation,” Trump said, “I think it’s really disgraceful.”
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