How a Fed tour sparked unexpected Trump praise for Powell

Washington Post

3 days ago

President Donald Trump's tour of the Federal Reserve's expansive office renovations Thursday had the makings of a public relations disaster for the central bank.
Instead, the meeting appeared to signal at least a temporary pause in one of the most contentious periods for the Fed, which has faced near-daily criticism from Trump and his advisers.
Trump has attacked Fed Chair Jerome H. Powell for not lowering interest rates and more recently for cost overruns on the $2.5 billion project. On Thursday, Trump took the unusual step of visiting the Fed in-person, something a sitting president hadn't done in nearly 20 years.
Instead of fireworks, what unfolded was a surprisingly cordial, if sometimes awkward, meeting amid an active construction site, featuring scaffolding, dumpsters and plywood-covered walls and stairs. Trump, wearing a white hard hat alongside Powell, refrained from criticizing the Fed chair, telling reporters he didn't want to make the meeting personal. He later said he wouldn't fire the Fed chair and signaled he wanted the project to proceed.
The visit did not produce the kind of dramatic confrontation seen in the Oval Office when Trump has sparred with foreign leaders, such as South African President Cyril Ramaphosa. Trump also departed without any commitments from Powell on lowering interest rates, although Trump tried. And, in a moment that has been widely shared across social media platforms, Powell even publicly corrected Trump on his claims about the project's rising cost.
'I don't think it was as successful as the White House hoped it would be,' said Anne Marie Malecha, chief executive of Dezenhall Resources, a public relations and crisis management firm. 'Powell came off friendly and factual. That doesn't play into the intended narrative of him being the villain.'
By Friday, Trump's tone toward Powell had shifted even further. The president — who has previously derided Powell as a 'moron,' 'numbskull' and 'a stiff' — was complimentary. Speaking to reporters before his trip to Scotland, Trump referred to Powell as a 'very good man.'
'We had a very good meeting,' Trump said. 'He said to me very strongly, the country is doing well. He said, 'Congratulations. The country is doing really well.''
Trump went on to suggest he took Powell's comments as a sign he might soon recommend that the Fed lower interest rates, which trickle through the financial sector to influence what millions of consumers and businesses pay for mortgage, autos and other types of loans.
Thursday's meeting between Powell and Trump came together abruptly. After White House officials declined a Fed offer to allow Trump's aides to tour the building site last Friday, the Fed offered an alternative Thursday. The Fed only learned that Trump himself planned to participate when the White House updated Trump's public schedule shortly after 10 p.m. Wednesday, according to a person familiar with the matter.
While the Fed is not expected to lower rates at its meeting next week, Powell and other top officials have said further cuts are possible later this year, potentially beginning in September — a move that Trump may view as an olive branch.
'The president is still going to be unhappy when the Fed doesn't cut interest rates next week,' said David Wessel, director of the Hutchins Center at the Brookings Institution. 'But in the PR battle, the Fed has fought Trump at least to a draw and may actually have won this round.'
At one point, the tour nearly turned confrontational, with Powell fact-checking the president's assertion that renovation costs had ballooned to $3.1 billion — far above the figure the central bank has cited. Powell shook his head and questioned the source of the figure. Trump pulled out a summary of costs that included another building, which reopened in 2021. He and Powell then pored over the document together.
'You just added in a third building, is what that is,' Powell told Trump. 'It was built five years ago.'
Trump responded that he was referring to 'overall work,' but quickly lightened the exchange when a reporter asked how Powell could stanch the torrent of criticism from the White House.
'Well, I'd love him to lower interest rates,' Trump said, after slapping the Fed chair on the back. 'Other than that, what can I tell you?'
The Fed, for its part, took the opportunity to praise Trump's visit, saying in a statement Friday that it appreciated 'the President's encouragement to complete this important project,' and emphasized its commitment to be 'careful stewards of these resources' as the work continues.