Trump Softens His Tone Towards Powell After Visiting the Federal Reserve Headquarters and Calls for Lower Interest Rates

SadaNews Economy - U.S. President Donald Trump downplayed the disagreement he had with Federal Reserve Chairman Jerome Powell regarding cost overruns during a tour of the central bank's renovation project, although he again took the opportunity to push for lower interest rates.

After a tour marked by public exchanges of criticism between Trump and Powell over the project's cost, Trump insisted that there were no tensions with the Fed chairman, noting that the project's issues probably did not rise to the level of justifying Powell's dismissal.

However, the notable tour did feature the president joking that under normal circumstances, he might fire a project manager overseeing similar overruns, while again joking with Powell, who has faced criticism from Trump over interest rates for months, saying, "Well, I would like him to lower interest rates. Other than that, what can I say?".

Public Exchange of Criticism Between Trump and Powell

The tour began with Trump and Powell speaking with reporters, who immediately disagreed about the project's cost. Both wore white hard hats and walked through a construction site, briefly speaking with reporters during the tour.

Powell objected to Trump's claims that costs had reached $3.1 billion, shaking his head during the president's discussion of the overruns. Trump presented Powell with a paper he said included details about the new estimate, but Powell told the president that the revised number included a building that had already been completed.

When a reporter asked Trump what he would do if a manager of one of his construction projects went over budget, he candidly replied, "In general, what would I do? I would fire him."

Powell laughed as Trump tapped him on the arm, saying, "I don't want it to be personal," adding, "I just want to see the project completed."

The president's visit represented a rare display and a public escalation in his conflict with the central bank's president. While Trump has routinely scolded Powell on social media and pressured him in a private White House meeting in May regarding interest rates, Thursday's meeting afforded him the opportunity to express his concerns directly from inside the Fed chairman's stronghold.

The visit also presented a dramatic picture of how the president, in his second term, is escalating pressure on the central bank and its chairman, threatening established norms regarding the independence of the Federal Reserve.

Trump Avoids Direct Criticism and Refrains from Targeting Powell

At the end of the brief tour, Trump refrained from making direct criticisms of the project. When asked by reporters if he saw mismanagement, he hesitated and said he saw "a very luxurious situation," but he understood that security measures and the need to build in the basement required high costs.

Trump said, "Look, there are always those who pass judgment after the fact; I don't want to be that person," adding, "I just want to help them finish the project."

For his part, Senator Tim Scott, a Trump ally and Republican from South Carolina, stated that he believes the project is "excessively expensive."

Trump asserted that "there were no tensions" with Powell during the meeting and refrained from disclosing details of their discussion about interest rates, referring to the quiet period imposed by the Federal Reserve before its upcoming meeting next week.

Trump said, "I think we had a good meeting." He also indicated that he does not see cost overruns as sufficient reason to dismiss Powell from his position.

The president said, "I don't want to put this in that category," and added, "I just want one simple thing to happen: interest rates should be lowered."

Bank Renovation Provides Opportunity to Attack Powell

The renovation project at the bank has given Trump and his allies a new weapon to intensify their criticisms of Powell, which they have focused on the project's cost of $2.5 billion, considering it a luxurious waste of money.

The Trump delegation included some of Powell's harshest critics within the administration, including Bill Bolte, head of the Federal Housing Finance Agency, who accused the Fed chairman of misleading Congress about the renovation and called for his resignation. Trump was also accompanied by budget director Russ Vought and White House Deputy Chief of Staff James Blair.

Earlier on Thursday, Blair posted on the platform "X" the figure Trump mentioned ($3.1 billion) and claimed that the renovation work "now surpasses the cost of the Palace of Versailles after adjusting for the current dollar value."

Powell has described reports related to the renovation as inaccurate and recently requested the bank's inspector general to review the project after criticisms from Republicans escalated.

The Federal Reserve is rehabilitating the "Mariner S. Eccles" building, the original headquarters of the bank built in 1937, as well as another historic building in Washington.

Causes of Project Budget Increase

Earlier on Thursday, Federal Reserve staff took reporters on a tour of the active construction site, where they said about 700 to 800 workers are on site daily in two shifts. Officials reported that cost overruns resulted partly from security requirements, including blast-resistant windows.

Federal Reserve officials responded to criticisms regarding other elements of the renovation, including a later-canceled plan to add seating on the roof and an 18-inch increase in the elevator height.

However, the overall project budget rose to $2.5 billion by 2025, compared to $1.9 billion in recent years, raising questions about the overruns.

Trump has attempted at various times to pressure Powell into resigning, consulting with deputies about whether he should directly fire him, but later reiterated that he does not plan to remove him and may wait until the end of his term.

Powell has shown no signs that he intends to leave his position before his term ends, and he has not ruled out staying on as a regular board member after his term as chairman ends in May.