President Donald Trump suggested that a $2.5 billion renovation plan at the Federal Reserve might be sufficient cause to fire Fed Chair Jerome Powell, an escalation of his recent attacks against the central banker.
“I think he’s terrible… But the one thing I didn’t see him as a guy that needed a palace to live in,” Trump told reporters. “But the one thing I would have never guessed is that he would be spending two and a half billion dollars to build a little extension onto the Fed.”
After a reporter asked if that was a fireable offense, Trump said “I think it sort of is.” Top administration officials have accused the Fed of mismanaging the project, and some Republicans have said Powell lied to Congress when he said the renovation won’t include some of upgrades described in official planning documents from 2021, such as Italian beehives and new marble finishes.
Trump didn’t specify what specifically would warrant Powell’s dismissal.
Trump has railed against Powell for months, demanding lower interest rates. But Fed officials have held rates steady this year, much to Trump’s ire. Nevertheless, the attacks have raised concerns that the data-dependent Fed could see its independence eroded.
Markets favor independent central banks – monetary authorities that set interest rates based on data and clear mandates, rather than political considerations potentially pushed by elected officials.
“The independence of the Fed is absolutely critical, and not just for the current Fed chairman, who I respect, but for the next Fed chairman,” JPMorgan Chase CEO Jamie Dimon, one of the most prominent Wall Street leaders, told reporters in a conference call earlier on Tuesday.
“Playing around with the Fed can often have adverse consequences, absolutely opposite of what you might be hoping for,” he continued.
Trump has admitted that his more personal attacks and pressure campaigns against Powell haven’t given him the lower interest rates he wants. The renovations have come up as a more recent line of attack against the Fed chair.
Powell has asked the central bank’s inspector general to conduct an additional review of the ongoing renovation, CNN previously reported. Last month, some Senate lawmakers grilled Powell over what they depicted as lavish upgrades to its DC headquarters at Powell’s semiannual monetary policy hearing.
The Fed’s renovation project was approved by its board in 2017 and originally cost $1.9 billion in 2019. Construction began in 2021, but the cost swelled to $2.5 billion because of “unforeseen conditions” requiring more spending to rectify, such as “more asbestos than anticipated, toxic contamination in soil, and a higher-than-expected water table,” according to the Fed’s website.
Trump has long directed his frustrations at Powell, calling him everything from a “numbskull” to a “moron.” Powell has publicly said that if it weren’t for the tariffs, the Fed would have already lowered rates this year by now and that Fed officials are waiting to see the impact of those tariffs before deciding to lower rates.
Trump disagrees. ”We should be at 1%,” Trump said at a luncheon event on Monday. “We should be less than 1%.”
CNN’s John Towfighi contributed to this report.
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