President Trump and his senior advisers have continued their criticism of Jerome H. Powell, the Federal Reserve chair, over his handling of the economy and a $2.5 billion renovation project at the central bank’s Washington headquarters. The administration shows no sign of letting up on its campaign against Powell, accusing him of mismanaging both fiscal policy and the costly headquarters revamp.
On Tuesday, President Trump labeled Powell as “political” for refusing to cut interest rates this year and ignoring repeated demands to lower borrowing costs by roughly 3 percentage points. These decisions have received unanimous backing from the Fed’s policy-setting committee.
“Our economy is on fire right now, breaking records,” Trump said during an appearance with Philippine President Ferdinand Marcos Jr. “But people can’t afford homes because this guy’s a numbskull. He keeps rates too high, probably for political reasons.”
Trump further alleged that Powell cut rates “just before the election to help Kamala, or whoever he thought he was helping, maybe without realizing it.” The Fed did lower rates by a percentage point last year as inflation eased and the labor market began to cool, including a half-point cut in September and quarter-point reductions in November and December.
Since then, the Fed has adopted a wait-and-see strategy on further rate cuts, citing economic uncertainty linked to Trump’s policies, including tariffs. Officials say they need more evidence that inflation is steadily declining toward the 2 percent target or that the job market is softening.
Although a few policymakers, including Trump appointee Christopher J. Waller, support immediate cuts, the majority believe there is no rush. Waller, viewed as a contender for the Fed’s top role, has publicly pushed for easing rates to spur growth.
The central bank’s caution has infuriated Trump, who blames Powell for dragging his feet and keeping federal debt servicing costs high. The president has escalated personal attacks against Powell and questioned whether to remove him before his term ends in May.
Senior administration officials are exploring ways to force Powell out early, focusing on the $2.5 billion renovation of the Fed’s headquarters near the National Mall. The project, launched in 2021, is about $700 million over budget. Features such as ornate water fountains and marble accents have led White House aides to deride it as a “Taj Mahal on the National Mall.”
In response, the Fed has defended the project and agreed to allow Trump’s deputy chief of staff, James Blair, to tour the site on Thursday. Blair recently joined a planning board that oversees the renovation, signaling the administration’s interest in using the project to undermine Powell’s leadership.
When asked on Tuesday whether Powell should resign, Trump said, “He’s done a bad job, but he’ll be gone soon enough anyway.”
Treasury Secretary Scott Bessent also took aim at the Fed on Monday, accusing it of exceeding its congressional mandate and urging a thorough internal review of its non-monetary operations.
“An exhaustive review would help restore the Fed’s credibility with Americans and refocus it on its core mission of guiding monetary policy,” Bessent wrote on social media.
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