WASHINGTON (AP) — The White House is taking aim at the Federal Reserve, criticizing a costly renovation at the central bank’s headquarters in an effort to pressure for lower interest rates. In a letter to Federal Reserve Chairman Jerome Powell, President Donald Trump’s top budget adviser expressed concern over the extravagant overhaul, citing potential violations of government building rules.
As part of a campaign to increase scrutiny, Trump appointed two close aides to the National Capital Planning Commission, signaling an unprecedented attempt to influence the traditionally independent Federal Reserve’s role in U.S. monetary policy. The move is seen as a push to remove Powell from his position before his term ends next May.
Trump has been vocal about his desire for lower interest rates, suggesting that Powell resign and be replaced by someone who would implement rate cuts. Powell, however, has resisted such pressure, citing concerns over potential inflation from the president’s tariff plans.
Despite Trump’s persistence in demanding lower rates, there is uncertainty over whether financial markets would respond accordingly. This could potentially lead to higher interest costs for consumers, highlighting the risks of intervening in monetary policy decisions.
The friction between Trump and Powell has escalated, with the president’s allies exploring ways to influence Powell’s tenure. While Trump has expressed no intention to directly remove Powell, his administration’s actions demonstrate a concerted effort to assert influence over the Federal Reserve’s operations.
The Trump-appointed director of the Federal Housing Finance Agency, Bill Pulte, raised concerns about Chairman Jerome Powell allegedly providing false information to Congress regarding renovations. Pulte called for a congressional investigation into Powell’s supposed political bias and misleading Senate testimony, suggesting that it warrants his removal. Additionally, Russell Vought criticized the extravagant initial renovation plans, labeling them as excessive. Powell clarified in Senate testimony that certain elements of the renovation project, like rooftop terraces and VIP dining rooms, have been removed from the updated plan for the Marriner S. Eccles Building. The dispute over the renovation may lead to a legal clash between the White House and the Federal Reserve, as the Fed has the authority to determine appropriate facilities for its operations. Financial expert Sung Won Sohn noted the importance of reviewing the central bank’s budget but cautioned against jeopardizing its independence, emphasizing the negative impact it could have on the economy and inflation expectations.
