President Donald Trump’s pressure campaign against the Federal Reserve and Chair Jerome Powell to lower interest rates entered a new front this week.
The latest line of attack comes from Office of Management and Budget Director Russell Vought, who wrote to Powell on Thursday to call out the renovation of the Federal Reserve’s Washington headquarters.
“The President is extremely troubled by your mismanagement of the Federal Reserve System,” Vought wrote in a letter posted to X. “Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington, D.C. headquarters.”
Asked by reporters Friday if he planned to fire the Fed chief, Trump said “no.” But fears persist. Trump’s attacks against Powell have been unrelenting, calling him everything from “very stupid” to insulting him as a “low IQ” person, and even saying, “I think he hates me.”
Vought, a longtime trusted Trump aide and veteran of his first term - when he served in the budget office in multiple roles - seized on testimony that Powell gave to the Senate Banking Committee on June 25, when he was asked by Sen. Tim Scott, R-S.C., about the Fed’s renovations. Scott told Powell that “Americans have lost confidence in the Federal Reserve since 2021.”
“During this time of hardship, the Fed has spent billions on lavish renovations to its D.C. offices. We’re talking about rooftop terraces, custom elevators that open into VIP dining rooms, white marble finishes and even a private art collection,” Scott claimed.
Powell promised the committee a detailed response in writing, before saying, “Generally, I would just say we do take seriously our responsibility as stewards of the public’s money.”
Powell then responded to each of Scott’s questions about the renovation: “There’s no [VIP] dining room. There’s no new marble. We took down the old marble, we’re putting it back up. We’ll have to use new marble, where some of the old marble broke. But there’s no special elevators. There’s just old elevators that have been there. There are no new water features. There’s no beehives, and there’s no roof terrace gardens.”
Vought, in his letter, said Powell’s testimony “raises serious questions about the project’s compliance with the National Capital Planning Act.” Just days ago, the White House appointed three new members to the National Capital Planning Committee who have direct ties to Trump and his administration.
Speaking Friday morning on CNBC, Vought further criticized Powell for building what he called “a palace” that he said would be “offensive for anyone going to the National Mall.”
But when pressed multiple times by CNBC about whether he would have posted his letter to Powell on social media if the Federal Reserve chair had expressed willingness to cut the interest rate at the July 30 meeting, Vought struggled to answer.
“The President is a builder. He’s horrified by the notion of cost overruns,” Vought said before turning his argument back to what he calls Powell’s “fiscal mismanagement of the Fed.”
Vought’s letter comes amid near-constant attacks from the president and his top aides against the central bank chief. Those attacks have also roiled markets. In April, just as Wall Street was starting to recover from a tariff-induced sell-off, Trump’s criticism of Powell sent them spiraling again.
Days later, Trump said he had “no intention” to fire Powell, and markets rose.
In May, the Supreme Court allowed Trump to fire several independent agency members but suggested that its legal reasoning would not apply to the Federal Reserve. The court noted that the Federal Reserve is a “uniquely structured, quasi-private entity” that has its own distinct historical tradition.
Powell has been asked repeatedly if he would leave the central bank if Trump asked him to or tried to fire him. “No,” was Powell’s stern one-word response in November. He has repeated the same answer since.
In early July, at a central banking conference, Powell was asked about Trump’s continued attacks. “I’m very focused on just doing my job,” he said, before adding that the only matters important to him are fulfilling the Fed’s congressionally mandated remits of full employment and price stability.
Central bank leaders in other countries and the European Union said they would be handling the pressure “exactly” as Powell has. Typically, the central banks of the European Union, U.K., Japan, Canada and Switzerland look to the Fed’s independent decisions to help guide their own.
