White House escalates pressure campaign on Fed chair by targeting its
headquarters renovation
[July 11, 2025] By
JOSH BOAK and CHRIS MEGERIAN
WASHINGTON (AP) — President Donald Trump is escalating his pressure
campaign to get the Federal Reserve chairman to either lower interest
rates or quit his post by targeting the expensive renovation at the
central bank’s headquarters.
The latest step came Thursday when Russ Vought, Trump’s top budget
adviser, sent a letter to Federal Reserve Chairman Jerome Powell saying
the president is “extremely troubled” that plans may have violated
government building rules with an “ostentatious overhaul.”
Trump also named two close aides to an obscure commission who plan to
review the Federal Reserve building plans — another avenue to increase
scrutiny on Powell, whose eight-year term formally ends next May.
This follows a near-daily drumbeat of criticism that Trump has leveled
at Powell, whom he has disparaged as “a very stupid person” who should
“resign immediately.” It’s an unprecedented attempt to reshape the
Federal Reserve’s traditional role as an autonomous arbiter of U.S.
monetary policy.
If successful in getting Powell to leave or getting interest rates
lowered, Trump will have expanded his influence to yet another corner of
American government that was once seen as beyond the reach of political
pressure. But he also risks jeopardizing the independence that has made
the central bank a foundational player in the U.S. economy.
Powell has sought to avoid politics and refrains from responding
directly to the president. Fed officials did not respond to an email
seeking a response to the letter, though Powell has previously said that
some parts of the renovation plans have changed.
Powell has so far resisted Trump’s pressure to cut rates, largely out of
concern that Trump’s tariff plans could increase costs for American
consumers. If rates are lowered too aggressively, it could lead to a
resurgence of inflation.
But Trump insists that inflation is no longer a problem, and a rate cut
would help make mortgages, auto loans and other forms of consumer debt
cheaper. Trump has also said it would allow the U.S. government to
finance its debt more cheaply, a pressing concern as legislation signed
by the president is poised to increase the federal deficit by extending
tax cuts.
“LOWER THE RATE!!!” Trump wrote on social media on Thursday.
However, there’s no guarantee that financial markets will reduce rates
on government debt even if the Fed bows to Trump’s wishes. Such a
situation could lead to higher interest costs for consumers — a reminder
of how monetary missteps may backfire.
Powell was nominated to the Federal Reserve Board of Governors by
President Barack Obama, then made chairman by Trump during his first
term. But in his second term, Trump turned Powell into one of his
primary antagonists.
Trump has said that he wouldn’t directly oust Powell. “I don’t know why
it would be so bad, but I’m not going to fire him,” he said last month.
The Supreme Court said in May that it could block such a step.
However, Trump's allies have found other ways to make Powell
uncomfortable.
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Office of Management and Budget Director Russell Vought walks at the
White House, Monday, July 7, 2025, in Washington. (AP Photo/Alex
Brandon)
 Bill Pulte, the Trump-appointed
director of the Federal Housing Finance Agency, also accused Powell
of lying to Congress about the renovations.
“I am asking Congress to investigate Chairman
Jerome Powell, his political bias, and his deceptive Senate
testimony, which is enough to be removed ‘for cause,’” he said last
week. Pulte said the situation “stinks to high heaven.”
Trump's naming of James Blair, a deputy chief of staff, and Will
Scharf, the staff secretary who furnishes the president with
executive orders for his signature, to the National Capital Planning
Commission also potentially ratchets up the pressure on Powell.
Blair said he would be “requesting a review of all previous and
current building plans” and suggested that Powell wasn’t honest
while testifying to Congress about the renovations last month.
If Powell isn’t truthful, Blair wrote on social media, “how else is
the American Public to maintain confidence that its monetary policy
manager is acting in their interests?”
Vought, in his own letter, called the initial renovation plans
featuring rooftop terrace gardens, VIP dining rooms and premium
marble an “ostentatious overhaul.” Vought also suggested that Powell
misled Congress by saying the headquarters had never had a serious
renovation, saying that an update to its roof and building systems
that was completed in 2003 counts as a “comprehensive” renovation.
Powell said in Senate testimony last month that some of the elements
in the 2021 plan, such as the dining rooms and rooftop terraces, are
no longer part of the project for the 90-year-old Marriner S. Eccles
Building.
The debate over the renovation could set up a legal battle between
the White House and the Fed, which under the law is allowed to use
its own judgment to establish “suitable” and “adequate” quarters for
its operations.
Sung Won Sohn, a finance and economics professor at Loyola-Marymount
University, said, “It’s good that the central bank budget is coming
under review and scrutiny.”
However, he warned against using such issues to challenge the Fed’s
independence. If that’s compromised, he said, it’s “bad for the
economy, that’s bad for inflation expectations and therefore long
term inflation.”
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Associated Press writer Fatima Hussein contributed to this report.
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