- Trump and Powell sparred over the $3.1 billion Fed renovation, with Powell disputing Trump’s figures.
- Trump has eased talk of firing Powell but continues to push for drastic rate cuts.
- The visit comes amid heightened political tensions and controversies involving the Trump administration.
President Donald Trump and Federal Reserve Chairman Jerome Powell engaged in a heated exchange on Thursday during a rare presidential visit to the Federal Reserve headquarters in Washington. The clash centered on the ballooning costs of the Fed’s multibillion-dollar renovation project, with Trump alleging the total has surpassed $3.1 billion — a claim Powell quickly disputed. “I haven’t heard that from anybody,” Powell responded, explaining that Trump was mistakenly including costs for a third government building completed years ago.
The visit, which saw Trump don a white hard hat alongside Powell and several senior officials, is part of the administration’s ongoing pressure campaign to force rate cuts. Trump, however, appeared to back off from his earlier threats to fire Powell before his term ends in May 2026, stating, “To do that is a big move, and I just don’t think it’s necessary.”
Political Pressure and Interest Rate Standoff
Trump’s push for lower interest rates remains a key theme of his administration’s economic agenda. He criticized Powell, calling him “Too Late,” and claimed that maintaining rates around 4.25%-4.5% is preventing Americans from affording homes while costing the U.S. hundreds of billions in interest payments. The president insists rates should be closer to 1%.
Despite the tension, Powell has kept rates steady since late 2024, even after the Fed cut by a full percentage point that year. Markets expect potential cuts later in 2025, but Trump continues to argue that aggressive action now would significantly reduce U.S. debt costs, which topped $1.1 trillion in 2024.
High-Profile Fed Visit Amid Broader Controversies
Thursday’s visit marked only the fourth time a sitting U.S. president has toured the Fed since 1937. Trump was joined by key officials, including Senators Tim Scott and Thom Tillis, Treasury Secretary Scott Bessent, and William Pulte, a vocal Powell critic and head of the Federal Housing Finance Agency.
The timing of the visit has raised eyebrows, as it coincides with growing scrutiny over the Trump administration’s handling of Jeffrey Epstein-related files. Critics suggest the event may be an attempt to shift public focus toward economic issues and away from this controversy.
Powell’s Future and Market Implications
While Trump has hinted at the possibility of replacing Powell, legal experts note that the president’s authority to fire a Fed chair is questionable. The Supreme Court has reinforced the independence of the Federal Reserve, making such a move both unprecedented and legally fraught.
Markets remain cautious but stable, anticipating the Fed’s next meeting. Investors are eyeing September for the first of potentially two rate cuts by year-end. However, Trump’s continued criticism of Powell and the Fed’s renovation spending adds another layer of uncertainty to the economic landscape.
