Federal Reserve Chief Fact-Checks Trump in Tense Exchange During Renovation Tour

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During a visit to the Federal Reserve’s headquarters in Washington, DC, President Donald Trump was corrected by Jerome Powell, the Federal Reserve chair, whom Trump has previously suggested he might fire.

Trump toured the site of a US$2.5 billion ($3.79 billion) renovation on Thursday, a project he has frequently criticized for being too costly.

In addition to his criticisms of the renovation project, Trump has also expressed frustration with Powell for not reducing interest rates, even calling him a “numbskull” earlier this week. Trump has indicated a desire to dismiss Powell but likely lacks the legal power to do so.

A tense moment occurred when Trump told reporters that the renovation was costing US$3.1 billion ($4.7 billion). Powell, shaking his head, replied, “I haven’t heard that from anybody.”

Trump then held up a document that allegedly outlined construction expenses but was informed that he had mistakenly included costs from the William McChesney Martin Jr Building project, which was not part of the current renovations.

“You just added in a third building,” Powell said, adding it was a renovation completed five years ago.

Trump went on to ask Powell if he expected additional cost overruns, to which he replied: “Don’t expect them.”

Asked by a reporter what, in his career as a real estate developer, he would do if a project manager went over budget, Trump said: “Generally speaking … I would fire them.”

Lately, Trump has somewhat eased his rhetoric about firing Powell. Though he labeled Powell a “numbskull” and criticized his performance earlier this week, Trump mentioned Powell would be gone in eight months, oddly setting a timeline extending past his own term, which ends in May 2026, raising questions about his rationale.

A man handing a piece of paper to another man.

According to Jerome Powell, President Trump mistakenly included the expenses from a finished project when he claimed a budget overrun for the central bank’s headquarters renovation. Source: AAP, AP / Julia Demaree Nikhinson

And after the visit, Trump said he did not intend to fire Powell.

“To do so is a big move and I just don’t think it’s necessary,” he told reporters.

Elevated by Trump to the top Fed job in 2018 and then reappointed by former president Joe Biden four years later, Powell last met with the president in March when Trump summoned him to the White House to press him to lower rates.

Trump has criticised Powell for months over his insistence on keeping the short-term interest rate at 4.3 per cent this year, after cutting it three times last year, when Biden was in office.

The visibly tense interaction between the pair comes less than a week before the central bank’s 19 policymakers are due to gather for a two-day rate-setting meeting, where they are widely expected to leave their benchmark interest rate in the 4.25 to 4.50 per cent range.

Trump has repeatedly demanded Powell slash rates by 3 percentage points or more.

“I’d love him to lower interest rates,” Trump said as he wrapped up the tour, as Powell stood by, his face expressionless.

— With reporting by the Agence France-Presse and Reuters news agencies