Trump and Powell tour Fed building renovations

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WASHINGTON (AP) — After months of criticizing Federal Reserve Chair Jerome Powell, President Donald Trump visited the Fed’s front door on Thursday, publicly scorning the central bank chief over the ballooning costs of a long-planned building project. Powell pushed back, challenging the president’s latest price tag as incorrect.

Wearing hard hats, standing in the middle of the construction project, Trump and Powell addressed the cameras. Trump charged that the renovation would cost $3.1 billion, much higher than the Fed’s $2.5 billion figure. Powell, standing next to him, shook his head.

The Fed Chair, after looking at a paper presented to him by Trump, said the president was including the cost of renovating a separate Fed building, known as the Martin building, that was finished five years ago.

The visit represented a significant ratcheting up of the president’s pressure on Powell to lower borrowing costs, which Trump says would accelerate economic growth and reduce the government’s borrowing costs.

“We have to get the interest rates down,” Trump said later after a short tour, addressing the cameras this time without Powell. “People are pretty much unable to buy houses.”

Trump is likely to be disappointed next week, however, when Fed officials will meet to decide its next steps on interest rates. Powell and other officials have signaled they will likely keep their key rate unchanged at about 4.3%. However, economists and Wall Street investors expect the Fed may start cutting rates in September.

Trump did step back a bit from some of his recent threats to fire Powell before his term ends May 26. Asked if the rising costs of the Fed’s renovation, estimated in 2022 to cost $1.9 billion, was a “fireable offense,” Trump said, “I don’t want to put this in that category.”

“To do that is a big move, and I don’t think that’s necessary,” Trump added. “I just want to see one thing happen, very simple: Interest rates come down.”

The Fed allowed reporters to tour the building before the visit by Trump.

Journalists get rare tour of Fed renovation

On Thursday, reporters wound through cement mixers, front loaders, and plastic pipes as they got a close-up view of the active construction site that encompasses the Fed’s historic headquarters, known as the Marriner S. Eccles building, and a second building across 20th Street in Washington.

Fed staff, who declined to be identified, said that greater security requirements, rising materials costs and tariffs, and the need to comply with historic preservation measures drove up the cost of the project, which was budgeted in 2022 at $1.9 billion.

The staff pointed out new blast-resistant windows and seismic walls that were needed to comply with modern building codes and security standards set out by the Department of Homeland Security. The Fed has to build with the highest level of security in mind, Fed staff said, including something called “progressive collapse,” in which only parts of the building would fall if hit with explosives.

During the tour, Fed staff also showed the elevator shaft that congressional critics have said is for “VIPs” only. Powell has since said it will be open to all Fed staff. The renovation includes an 18-inch (45-cm) extension so the elevator reaches a slightly elevated area that is now accessible only by steps or a ramp. A planning document that said the elevator will only be for the Fed’s seven governors was erroneous and later amended, staff said.