Trump's Fed building tour ends with a relief signal for Powell
There's 'no tension' with Powell, Trump said after the Thursday tour — which featured the two men publicly trading barbs over the cost of a project that the president's allies have used to blast the Fed chair's leadership.
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The president indicated that problems with the project probably weren't reason enough to fire the central bank head. 'To do that is a big move, and I just don't think it's necessary,' he told reporters.
Investors reacted, sending the dollar higher and gold prices lower.
'The Fed chair is apparently safe for the time being,' Ian Lyngen, head of US rates strategy at BMO Capital Markets, wrote in a note to clients. 'It's notable that the rumblings on Powell's replacement are no longer center stage,' he added, while highlighting things may well change next Wednesday, with the Fed expected to keep rates on hold.
The remarkable tour was not without moments of tension. The president joked that he might ordinarily remove a project manager who oversaw similar cost overruns. He ribbed Powell — who for months has faced presidential criticism — over interest rates.
'Well, I'd love him to lower interest rates. Other than that, what can I tell you?' Trump said.
For its part, the Fed said in a statement Friday it was 'honored to welcome the president yesterday for a visit to our historic headquarters.'
'We are grateful for the president's encouragement to complete this important project,' the Fed said.
The president's visit was a rare spectacle, with Trump being the first president to visit the Federal Reserve in nearly two decades — a dramatic example of how in his second term he has ramped up his pressure on the chairman, threatening longstanding norms about the central bank's independence and autonomy, in his bid to secure lower rates. Trump's second White House term has been marked by an expansion of executive power that's helped him bring myriad institutions and industries to heel — except the Federal Reserve.
The tour opened with Trump and Powell, wearing white hard hats, coming down the dimly lit hallway to speak with reporters. Trump honed in on what he and his allies say is an exorbitant cost for renovating a federal building, while Powell shook his head. In a tense moment, a visibly uncomfortable Powell pushed back and shook his head when Trump claimed the renovation costs had hit $3.1 billion.
'Third Building'
When the president offered Powell a piece of paper he cast as offering details on the new estimate, Powell tersely told Trump his revised claim included a building that had already been completed.
'That's a third building,' Powell said, interrupting the president. 'It was built five years ago.'
Asked by a reporter what he would do if a manager on one of his construction projects had gone over budget, Trump replied bluntly. 'Generally speaking, what would I do?' Trump said. 'I'd fire 'em.'
Powell laughed as Trump knocked him on the arm and the president added that he did not 'want to be personal.'
'I just would like to see it get finished,' Trump said.
The scene suggested there wasn't much of a thaw between the two men, who almost immediately assumed the stances they have taken for months. The renovation at the bank has offered Trump and his allies another weapon to intensify their criticism of Powell as they seize on cost overruns, casting the renovation as an extravagant project that is wasting money. Thursday's visit to see the work first-hand put Trump standing side-by-side with the central bank chief that he has regularly lambasted and tried to humiliate on social media.
Still, at the conclusion of the tour, Trump was asked if he had seen evidence of mismanagement and waste and ultimately demurred. While he said he saw a 'very luxurious situation taking place,' the president conceded that he understood that security measures and need for construction in the basement brought with it high costs.
'Look, there's always Monday morning quarterbacks — I don't want to be that,' Trump said. 'I want to help them get it finished.'
And while the real estate mogul, who regularly touts his experience having overseen massive construction projects in his home of New York, said he had undertaken bigger jobs than the Fed work in the past and kept costs manageable, he indicated he did not consider the cost overruns alone enough to remove Powell from the job.
'I don't want to put that in this category,' Trump said.
The president also repeatedly turned his focus back to the central bank's rate-setting policies.
'I just want to see one thing happen, very simple: Interest rates have to come down,' he said.
More broadly, Trump said he and Powell had a 'good meeting' but declined to characterize their private discussion on interest rates, alluding to the Fed's current blackout period ahead of their meeting next week.
'You know, his term comes up soon. I think he's going to do the right thing. Everybody knows what the right thing is,' he added.
Federal Reserve officials are widely expected to hold interest rates steady for a fifth consecutive time following their meeting next week. A majority of policymakers expect to lower rates at least twice before year end, according to projections released in June. But Powell and several other officials have said they prefer to approach policy adjustments carefully, as they guard against the possibility that Trump's tariffs policies will lead to persistent inflation. Policymakers have also said an overall stable labor market provides them room for patience on interest-rate cuts.
Despite Trump's pressure, which has seen him consult lawmakers on whether he should fire Powell and at time insist he has no such plans, the chairman has given no indication that he's considering leaving early or even ruled out staying on as a regular board member once his term as chair expires in May.
Trump's entourage includes some of the most strident critics of Powell in the administration, including Bill Pulte, the head of the Federal Housing Finance Agency, who has accused the chairman of misleading Congress about the renovation and called for his resignation. and budget director Russ Vought.
Speaking to reporters after the tour, Vought said that the tour had given administration officials more insight into the work but that they still had questions that had not been answered. Vought said that some of the work could have been done better and that the renovation had to control costs.
Powell has called reports about the renovation work inaccurate and after Republican criticism intensified in recent weeks, made a request for the bank's inspector general to review the restoration work.
Earlier Thursday, Fed staff led reporters on a tour of the active construction site, which they said hosts about 700 to 800 workers daily over two shifts. Cost overruns have been driven in part by security requirements, including blast-resistant windows, officials said. Still, the overall project's budget has grown to $2.5 billion in 2025 from $1.9 billion in recent years, fueling questions about overruns.
In a social media post after he returned to the White House, Trump said the renovation work 'would have been much better if it were never started, but it is what it is and, hopefully, it will be finished ASAP,' before again pivoting to interest rates.
'With all of that being said, let's just get it finished and, even more importantly, LOWER INTEREST RATES!,' he wrote.
Wingrove and Omeokwe write for Bloomberg.
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