President Donald Trump may try to oust Federal Reserve Chair Jerome Powell by accusing him of mismanaging a $2.5 billion building renovation project on two Fed buildings in Washington. The push comes after a monthslong campaign by Trump to remove the politically independent central banker, who has resisted his calls to slash interest rates.
The Supreme Court recently signaled that Trump cannot fire Powell simply because he disagrees with him on interest rates. However, he could do so “for cause,” such as misconduct or dereliction of duty. Trump has seized on this provision, suggesting that Powell’s handling of the extensive renovation project could be grounds for taking the unprecedented and possibly legally dubious step of firing him.
The renovation project has been underway for years, with costs ballooning over time due to inflation spikes and local restrictions on building heights. The Fed cites many reasons for the increased expense, including rising construction costs and more asbestos needed to be removed than expected.
Trump administration officials have criticized the Fed’s handling of the project, saying it is “ostentatious” and that Powell is being reckless with taxpayer money. However, some elements were removed from initial building plans submitted in 2021, and Powell disputes the claims made by White House officials.
The renovation will update the Fed’s main headquarters with modern electrical and communications systems, remove hazardous elements, and add rooftop terrace gardens, VIP private dining rooms, and elevators among other features. The project is seen as a crucial step in maintaining the Fed’s independence from day-to-day politics.
Removing Powell could undermine the Fed’s ability to fulfill its dual mandate of maximizing employment and keeping prices stable, potentially leading to higher inflation, higher interest rates, and a weaker economy.
Source: https://apnews.com/article/trump-powell-federal-reserve-building-renovation-2393d9ac9fdb9508f285d0faa5f4de41