U.S. President Donald Trump looks on as Jerome Powell, his nominee at the time to lead the U.S. Federal Reserve, moves to the podium at the White House in Washington, U.S., November 2, 2017. REUTERSCarlos Barria
Federal Reserve Chairman Jerome Powell may have been appointed by President Donald Trump in 2018, but the president quickly soured on him.
Since taking office, The Guardian noted that Trump has been at war with both Powell and the central bank in general. At an embarrassing photo-opportunity in July, Trump endeavored to start a scandal by falsely claiming that the historic building was spending $3.1 billion for renovations.
Powell shook his head looking at the piece of paper Trump was citing.
"You just added in a third building is what that is," Powell corrected. “It was built five years ago."
“There’s no VIP dining room, there’s no new marble … there are no special elevators, just old elevators that have been there,” Powell testified before the Senate in June.
The Central Bank, which doesn't operate under congressionally appropriated funding, is paying $2.5 billion for renovations after it became clear there were structural issues for the buildings and asbestos.
"Never before has a president been so publicly, and relentlessly, critical of the country’s top monetary policymaker," The Guardian report said. For decades, successive administrations have allowed the Fed, as the institution tasked with steering the US economy, to function independently, without political interference. No longer."
The report noted that few believe it stops there and will likely "intensify in the coming months."
“The institution was built to withstand a moment like this,” former Federal Reserve economist Claudia Sahm, said. “Some of the battle lines were drawn, but we haven’t seen this play all the way out.”
Trump has demanded the interest rate standard be dropped for years, claiming it would dramatically improve the economy. However, "higher interest rates can calm inflation, but also risk raising unemployment. Lowering rates can stimulate economic growth, but risk higher prices," the report said.
Unemployment is indeed on the rise, increasing from 3.7 percent to 4.6 percent from Nov. 2024 to Nov. 2025.
Under a new chair, Ryan Sweet, chief economist at Oxford Economics warned, “If there are any cracks in the Fed’s independence, it will spread very, very quickly. That’s going to really affect market and inflation expectations … So it’s actually counter to what the White House wants.”
“The Fed is always a political lightning rod. When things go wrong, the Fed is the first to blame. They get a lot of criticism when things aren’t going right, and they don’t get a lot of praise when things are going well,” said Sweet.
Trump, however, promised that the next chair of the Federal Reserve would listen to his demands.
"I’m a smart voice and should be listened to," Trump told the Wall Street Journal earlier this month.