WASHINGTON ― President Donald Trump and Federal Reserve chair Jerome Powell clashed as they toured ongoing renovations of the Fed’s headquarters, with the chairman correcting the president over some of his claims about cost overruns.
Despite past threats to fire Powell over the project, Trump left the Federal Reserve building and called it a productive meeting, saying he didn’t see enough to justify the chairman’s termination.
“I don’t think it’s necessary,” Trump said.
The president’s rare presidential visit to the Federal Reserve building came as Trump has accused Powell of potential fraud related to the ballooning cost of the agency’s $2.5 billion headquarters renovation of two historic buildings on the National Mall. Trump and several White House advisers requested the tour to inspect the work firsthand.
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But it was Powell pushing back at Trump before the tour got underway when the president claimed the project had swelled to $3.1 billion.
“It went up a little bit ‒ or a lot,” Trump said to Powell, both men wearing white hard hats.
Powell shook his head in disagreement. “I’m not aware of that, Mr. President. I’ve not heard about that from anyone at the Fed.”
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The president handed him a sheet of paper. Powell took a glance and then informed the president that his dollar figure also included the cost of renovating the Martin Federal Building, which was completed in 2020.
“You’re including the Martin renovation. You just added in a third building. That’s what that is,” Powell said.
“I know, but it’s a building that’s being built,” Trump said.
Powell responded: “No, it was built five years ago. We finished Martin five years ago.”
Fed’s explanation for cost overruns
The original cost of the current renovation was estimated at $1.9 billion in 2019 before increasing to $2.5 billion. The Fed said the more than 33% increase was due to design changes, costs of materials, equipment, labor, and other “unforeseen conditions” such as more asbestos than anticipated and toxic contamination in the soil.
Powell told Trump that the Fed does not foresee additional cost overruns and expects the renovation to be completed in 2027. “We’re well along, as you can see,” Powell said.
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Though Trump has recently fixated on the cost of the Fed’s renovation, the president has for months criticized Powell for keeping interest rates steady and ignoring his calls to lower them, mocking him as “too late” for not acting.
“Well, I’d love him to lower interest rates. Other than that, what can I tell you?” Trump said when asked if there’s anything Powell can do to get Trump to back off his criticism. “The country is booming and the interest rates are a final little notch.”
Powell has cited anticipated rising inflation from Trump’s massive tariffs on imports as a reason to keep the rates unchanged. Inflation accelerated in June, the Labor Department announced July 15, with prices rising by 2.7% over the past 12 months. It was the highest annual inflation rate since February.
Trump says cost overruns are not something to be fired over
Trump and Powell toured the facility for less than an hour. They were joined by Republican Sens. Tim Scott of South Carolina and Thom Tillis of North Carolina, White House officials, Bill Pulte, chairman of Fannie Mae and Freddie Mac, construction professionals, and Trump-appointed members of the National Capital Planning Commission.
Before they began, Trump was asked by a reporter what he would do during his long career as a real estate developer with project managers who exceeded their construction budgets.
“Generally speaking, what would I do? I’d fire him,” Trump said, later pointing to expensive underground garage parking and basement expansions as unnecessary add-ons.
But after the tour was finished, Trump took a very different tone. He told reporters he saw a “very luxurious situation taking place” with the renovation, calling the meeting “very productive” and insisting there was no tension and that he doesn’t envision firing Powell.
“I don’t want to put that in this category,” Trump said when asked whether the project is a “fireable offense.”
Trump later said that he believes Powell will “do the right thing” and lower interest rates. “It may be a little ‘too late’ as the expression goes. But I believe he’s going to do the right thing.”
Trump nominated Powell as Fed chair in 2017. He was confirmed by the Senate in January 2018 for a four-year term, and again in 2022 after former President Joe Biden renominated him for the post. Even though Powell’s term as chairman ends in 2026, his term as a member of the Fed’s board runs through the end of 2028.
Reach Joey Garrison on X @Joeygarrison.
This article originally appeared on USA TODAY: Trump spars with Powell but backs off firing threat in clash at Fed
