Trump Targets Fed Chair Powell Over $2.5B Renovation \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ President Trump visited the Federal Reserve amid rising tensions with Chair Jerome Powell over a $2.5 billion renovation project. Trump criticized Powell’s spending and refusal to lower interest rates, suggesting both may be grounds for dismissal. Economists warn firing Powell could jeopardize the Fed’s independence.
Quick Looks
- Trump visits Federal Reserve after blasting Powell’s renovation spending.
- The Fed’s renovation costs surged from $1.9B to $2.5B.
- Trump called the building project “disgraceful” and grounds for firing.
- Powell has kept interest rates steady at 4.3% in 2025.
- Trump has demanded lower rates to ease debt payments.
- Powell cites economic uncertainty from Trump’s tariffs on imports.
- Trump’s pressure raises concerns over Fed’s independence.
- Underground construction and inflation pushed renovation costs higher.
- Economists say removing Powell would destabilize markets.
- Trump previously cut rates three times during his first term.
Deep Look
President Donald Trump’s growing public feud with Federal Reserve Chair Jerome Powell reached a new peak Thursday, as Trump visited the Federal Reserve’s Washington headquarters following blistering criticism of Powell’s handling of a multibillion-dollar renovation project and ongoing disputes over interest rate policy. The visit, though officially unannounced on Trump’s public schedule, signaled the president’s increasing willingness to challenge the Fed’s independence and elevate economic management into a personal political battleground.
The immediate flashpoint is a ballooning renovation project at the Fed’s historic headquarters and an adjacent facility. Originally estimated at $1.9 billion, the project’s cost has climbed to $2.5 billion due to inflation, supply chain disruptions, and complex underground construction work — developments that have drawn the ire of Trump, who has publicly described the spending as “disgraceful” and hinted that it could serve as a legitimate reason to fire Powell.
“When you spend $2.5 billion on, really, a renovation, I think it’s really disgraceful,” Trump said during a press briefing last week. “I think it is,” he added, when asked whether Powell’s oversight of the project could justify his removal.
This renewed clash between the White House and the central bank raises alarms among economists, financial analysts, and legal scholars, many of whom view the Fed’s independence as a cornerstone of U.S. economic stability. While the president appoints the Fed chair, the position is designed to function independently from the political pressures of the executive branch — a principle that dates back over a century.
Monetary Policy at the Heart of the Conflict
Trump’s frustrations with Powell are not limited to construction costs. The deeper tension lies in the Fed’s interest rate policy. Powell has held the benchmark short-term interest rate steady at 4.3% throughout 2025, even as Trump and his economic advisers push for aggressive rate cuts to stimulate growth and reduce the cost of government borrowing.
With federal debt reaching historic levels and the administration under pressure to fund infrastructure, military expansion, and tax relief measures, Trump has framed the Fed’s reluctance to lower rates as an act of economic sabotage.
“The Fed needs to cut rates — now,” Trump declared earlier this year. “Not next quarter, not next year. Americans are paying too much, and the economy is being held back.”
Powell, however, remains cautious. He has pointed to the lingering effects of Trump’s broad tariffs on imports — including Chinese electronics, steel, and agricultural goods — as factors contributing to persistent inflationary pressures. The Fed, he argues, must be deliberate to avoid reigniting inflation after the spikes of 2021 and 2022.
“Our approach is data-driven,” Powell said in a recent public appearance. “Premature action could undo the progress we’ve made.”
This kind of resistance has only intensified Trump’s criticisms, especially as his administration tries to drive down interest payments on the national debt. In campaign-style speeches, Trump has often pointed to Powell as a “holdover from the swamp,” despite appointing him to the role during his first term in 2017.
Renovation Becomes Political Symbol
The Fed’s renovation project, while seemingly a routine infrastructure upgrade, has become a lightning rod for political controversy. The construction involves seismic retrofitting, underground infrastructure repair, and modernizing outdated safety systems in two aging buildings, including the iconic Eccles Building on Constitution Avenue.
Fed officials argue that the updates are critical to ensuring physical security and continuity of operations, particularly in a post-COVID, cyber-threat-conscious world. The bulk of the cost increase has been attributed to inflation in the cost of steel, cement, and labor — factors affecting construction projects nationwide.
Yet to Trump, the project symbolizes what he sees as Powell’s mismanagement and detachment from fiscal responsibility.
“Everywhere else in government we’re cutting waste,” Trump said. “Meanwhile, Jerome is digging tunnels under the Fed for $2.5 billion.”
White House insiders say the president is using the renovation’s ballooning cost as a tangible example to rally fiscal conservatives around his broader agenda of government accountability. The issue has been heavily featured in fundraising emails and social media posts shared by the president and his allies.
Trump’s Thursday visit to the Fed headquarters was reportedly focused on reviewing renovation progress, though no press was allowed inside. Observers note that the visit’s timing was no accident — it served to spotlight the conflict at a time when Trump is seeking maximum political leverage over both monetary policy and his broader economic narrative.
Could Trump Fire Powell? Legal, Economic Risks Loom
While the Federal Reserve Act allows for the removal of the Fed chair “for cause,” it does not define what that cause must be. Traditionally, “cause” has been interpreted to mean misconduct or incapacity, not policy disagreements or budget overruns.
Legal scholars say firing Powell over a construction project or his stance on interest rates would be unprecedented and could trigger a constitutional showdown.
“If Trump removes Powell based on this renovation issue, he’s essentially asserting that the president can fire the Fed chair at will,” said Peter Conti-Brown, a professor of financial regulation at the University of Pennsylvania. “That undermines the Fed’s institutional credibility and could send shockwaves through financial markets.”
Wall Street analysts echo that concern. Markets tend to react poorly to perceived political interference in monetary policy. Analysts at Goldman Sachs and J.P. Morgan have already issued memos warning that Powell’s removal could spook investors, weaken the dollar, and drive up long-term interest rates due to uncertainty over the Fed’s future direction.
The mere suggestion of Powell’s dismissal has created volatility. After Trump’s remarks last week, Treasury yields spiked slightly, reflecting nervousness about potential changes at the top of the central bank.
Political Strategy or Economic Vision?
Critics say Trump’s attacks on Powell serve dual purposes: applying pressure for lower rates and deflecting attention from other politically damaging issues. The controversy over the Fed’s renovation, for example, helps divert attention from investigations tied to Jeffrey Epstein, ongoing foreign policy struggles, and mixed economic indicators heading into Trump’s third year of his second term.
At the same time, Trump may be setting the stage to reshape the Fed in his image — replacing Powell with someone more loyal and aligned with his economic instincts.
“There’s no question this is about control,” said Sheila Bair, former chair of the FDIC. “Trump wants a Fed that doesn’t just work independently — he wants one that works for him.”
Yet that approach risks alienating even traditional Republican allies who view the Fed’s independence as essential. While Trump’s base may cheer his combative style, GOP lawmakers on financial committees have so far remained publicly silent, aware of the potential market implications.
Looking Ahead: More Than Monetary Policy at Stake
Whether Trump actually moves to fire Powell remains uncertain. But the threat itself is meaningful. It could shape future decisions within the Fed, influence investor behavior, and spark debate about presidential authority over what has traditionally been a politically neutral institution.
The renovation project will continue — as will Powell’s tenure, unless Trump decides to take unprecedented action. But in the broader political landscape, this episode is not just about one construction budget or one interest rate decision. It’s about a shifting balance between political power and institutional integrity in the Trump era.
As Trump leans further into economic nationalism, and as he sharpens his critique of elite institutions, the Federal Reserve may increasingly find itself caught between its mandate to stabilize the economy and a president determined to bend it toward his vision.
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