Trump to visit Fed as pressure on Powell mounts

Donald Trump is set to make the first visit by a sitting president to the US central bank in roughly two decades as his pressure on the Federal Reserve intensifies.

Trump will tour buildings undergoing a $2.5bn (£1.8bn) renovation, which the White House has accused Fed chairman Jerome Powell of mismanaging.

The attack is the latest in a drumbeat of criticism Trump has mounted against Powell, who Trump says is moving too slowly to cut interest rates.

He has repeatedly floated the possibility of firing Powell, only to quickly disavow the idea, which analysts say would rock financial markets and spark a legal battle.

Trump’s visit would mark only the fourth visit by a president to the Fed in recent history and the first since former president George W Bush attended the swearing-in of Ben Bernanke as Fed chairman in 2006.

It comes ahead of the Fed’s meeting in Washington next week, where policymakers are widely expected to vote to leave interest rates unchanged.

A spokesperson for the Fed said it was “working with the White House to accommodate their visit”.

Under US law, governors of the central bank can only be removed “for cause”, typically understood to be major misconduct.

The protection was intended to help insulate the bank from political pressure and ensure its leaders set policy in the best interests of the economy.

Legal experts have said cost overruns on the construction project would not typically meet that bar.

But White House officials and Trump allies have honed in on the issue, with press secretary Karoline Leavitt describing the renovation as “overpriced” and “completely unnecessary”.

Trump – who has alternately referred to Powell as a “numbskull”, “stubborn mule” and “Trump hater” – told reporters this month that he believed mismanagement of the plan was “sort of” a fireable offence.

“When you spend $2.5bn on, really, a renovation, I think it’s really disgraceful,” he said. He also that it was “highly unlikely” that he would fire Powell “unless he has to leave for fraud”.

This week, Leavitt told reporters that Trump has “no plans” to fire Powell, although he should “cut interest rates”.

Democrats have accused Trump of trying to use his attacks on Powell to “distract and deflect”, as he faces pressure from his support base over his handling of Jeffrey Epstein files.

They have also argued he is setting up Powell to be the scapegoat should the US economy weaken.

Typically, the Fed lowers rates when the economy is in trouble, hoping that by making it easier to borrow it will boost economic activity and keep employment stable.

It raises interest rates when it is worried about inflation, aiming to slow activity and ease pressures pushing up prices.

Economists say Trump’s radical changes to economic policy, including higher tariffs, tax cuts, reductions in government spending and a crackdown on immigration, have raised risks of both scenarios, making it difficult to know what the bank should do.

Powell has said he believes the economy is stable enough for the Fed to wait to see what happens.

Trump has said the bank should be cutting interest rates to reduce the US government’s hefty borrowing costs and to make it easier for Americans to get mortgages and other loans.

He maintains that inflation, which rose to 2.7% in June, has faded as a problem.

Powell was appointed by Trump to lead the bank in 2017, and renominated by Joe Biden. His term as chairman is set to end in May 2026.

The renovation project under attack was first approved in 2017 and was intended to allow the bank to consolidate its operations.

It involves two buildings from the 1930s.

The Fed has blamed the cost overruns on issues such as finding more asbestos than expected, and disputed White House characterisations of other aspects of the project, such as whether it involves a “VIP elevator”.

Reporting contributed by Bernd Debusmann Jr