Washington (AFP) – Donald Trump is due to visit the US Federal Reserve Thursday as the president escalates his pressure on its chairman Jerome Powell over the central bank’s management of the economy. Trump — who wants to oust Powell for refusing to lower interest rates but likely lacks the legal authority — has threatened instead to fire the Fed chief over cost overruns for a renovation of its Washington headquarters. The White House did not specify whether Trump would meet Powell, who has vowed to remain in place until the end of his term next May, but the president would likely welcome any encounter.
The afternoon tour comes with Trump desperate to shift focus from the crisis engulfing his administration over its decision to close the file on multi-millionaire sex offender Jeffrey Epstein, who died in 2019 while awaiting trial on trafficking charges. Attorney General Pam Bondi informed the president in the spring that his name appeared in the Epstein files, according to the Wall Street Journal. Trump has picked all manner of targets, including his Democratic predecessors and former chiefs of the security and intelligence services, as he bids to move Epstein out of the headlines.
He again berated Powell on Wednesday, moments after Treasury Secretary Scott Bessent had appeared on television to claim Powell’s job was safe. “Housing in our Country is lagging because Jerome ‘Too Late’ Powell refuses to lower Interest Rates,” Trump thundered on his social media platform, Truth Social. Presidential visits to the Federal Reserve are not unheard of — Franklin D. Roosevelt, Gerald Ford, and George W. Bush all made the trip — but they are rare. They have been viewed in the past as an attempt to influence monetary policy.
Trump has criticized Powell for months over his insistence on keeping short-term interest rates at 4.3 percent this year after cutting it three times last year, when Joe Biden was in office. Powell says he is monitoring the response of the economy to Trump’s dizzying array of import tariffs, which he has warned could lead to a hike in inflation. But Trump has angrily accused Powell of holding back the economy, calling the man he nominated in his first term “stupid” and a “loser.”
Soaring costs for the Fed’s renovation of its Washington headquarters and a neighboring building — from an initial $1.9 billion to $2.5 billion — have caught Trump’s attention. Trump’s budget director Russell Vought wrote to Powell earlier this month to tell him the president was “extremely troubled by your mismanagement of the Federal Reserve System.” “Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington, D.C. headquarters,” Vought wrote.
The Federal Reserve, the world’s most important central bank, makes independent monetary policy decisions and its board members typically serve under both Republican and Democratic presidents. Its 12-member Federal Open Market Committee votes on any decisions concerning interest rates and can, in theory, disagree with the views of the chairman. Experts question whether Trump has the authority to fire Powell, especially since a Supreme Court opinion in May that allowed the president to remove other independent agency members suggested that this did not apply to the Fed. When asked last week if the costly rebuilding could be grounds to fire Powell, Trump said, “I think it is.”
Before the visit, Trump plans to sign executive orders at the White House on Thursday afternoon, as he continues to face pushback from his supporters over his handling of the Epstein case. Justice Department officials were to interview Ghislaine Maxwell, Epstein’s imprisoned accomplice, on Thursday in her cell in Tallahassee, Florida, US media reported.
© 2024 AFP
