White House Ramps Up Pressure in Campaign To Nudge Powell Out of Chairmanship of the Fed

The Trump administration is not relenting in its fight against the Federal Reserve chairman, Jerome Powell, saying well into President Trump’s second term that he has been “too late” in cutting interest rates. He has faced criticism from the White House and its Republican allies in Congress for his lack interest rate cuts, as well as for a pricey renovation of the Fed’s headquarters. The central bank’s Federal Open Market Committee is set to meet at the end of this month to consider whether to cut rates — something it declined to do at its last meeting, which elicited the rage of the president himself. Mr. Powell has said he will make decisions about rate cuts based on the data that come before him, including inflation numbers. Core inflation just ticked up to its highest level since earlier this year, which has some concerned that a rate cut will not come. Secretary Bessent took the administration’s criticisms slightly further on Monday, saying that he doesn’t know what the Fed’s many economists do all day. He says he has been frustrated by the Fed’s projections for higher inflation leading the board to not cut rates, even though inflation has not spiked as much as some had predicted. “There was fearmongering over tariffs, and thus far, we have seen very little, if any, inflation. We’ve had great inflation numbers,” Mr. Bessent said during an interview with CNBC on Monday. “I think this idea of them not being able to break out of a certain mindset. … All these Ph.D.s over there, I do not know what they do. I do not know what they do. This is like universal basic income for academic economists.”Mr. Bessent also said that it was time to “examine” the Federal Reserve more broadly in order to possibly reform how the institution does its job. He compared it to simply leaving the FAA alone, even though there had been serious problems at the agency. “What we need to do is examine the entire Federal Reserve institution, and whether they have been successful,” Mr. Bessent said Monday. “I’m gonna be in the building this evening. There is a regulatory conference that begins tomorrow. I am the keynote speaker tonight. … The Fed deals with monetary policy, regulations, financial stability, and again, I think that we should think, ‘Has the organization succeeded in its mission?’”“If this were the FAA and we were having this many mistakes, we would go back and look at: ‘Why has this happened?’” he said. A spokesman for Mr. Powell did not immediately respond to a request for comment. White House staffers, too, have been training their guns directly at the Fed chairman, whom Mr. Trump himself appointed to the job during his first term. The president’s deputy chief of staff, James Blair, has been musing online about the question of whether Mr. Powell lied to Congress in June about the Fed’s renovations. “Blaming Trump appointees for the marble looks like a failed attempt at narrative shift by some 2nd rate PR firm hired by Powell. Too Late just testified in front of Senate Banking on June 25th that No New Marble was use,” Mr. Blair wrote on X on Saturday, using the president’s nickname for Mr. Powell, which is “Too Late” due to his failure to cut rates. “Again we must ask, did he lie to Congress?” Mr. Blair said. It isn’t just the executive branch that is getting in on the Powell-bashing. On Monday, Semafor reported that the chairman of the Senate Banking Committee, Tim Scott, who has jurisdiction over the Fed, will go with White House staff this week to tour the Federal Reserve headquarters to observe renovations. Earlier this month, the director of the Office of Management and Budget, Russ Vought, sent a letter to Mr. Powell demanding he answer questions about the renovations at the Federal Reserve, which he says are about $700 million over budget. “The President is extremely troubled by your management 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,” Mr. Vought said in his letter. Many viewed this as a potential predicate to firing Mr. Powell “for cause,” though the president has denied that he is considering firing the chairman ahead of his term expiring next year. In his own letter responding to Mr. Vought just days later, the chairman defended the renovations to the nearly century-old building. “The project is large in scope because it involves the renovation of two historic buildings on the National Mall … that were first constructed in the 1930s,” Mr. Powell wrote on Thursday. “Both buildings were in need of significant structural repairs and other updates to make the buildings safe, healthy, and effective places to work.” Mr. Powell says he has asked the inspector general of the Federal Reserve to review cost overruns.

White House Ramps Up Pressure in Campaign To Nudge Powell Out of Chairmanship of the Fed

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