Jerome Powell, Donald Trump argue at Federal Reserve building site over cost blow-outs, feud continues

Donald Trump has confronted Jerome Powell in a tense exchange in front of the media, further fuelling his ongoing dispute with the Federal Reserve chairman.

The awkward clash happened as Mr Trump took a tour of the under-construction Federal Reserve building.

The two men have been at loggerheads for months, with the US President repeatedly taking issue with Mr Powell for not lowering interest rates for Americans.

Mr Powell has resisted intense pressure from Mr Trump and his administration to do so, instead adopting a steady approach, remaining reluctant to slash rates while the President’s new tariffs disrupt the US economy.

Under the US system, the President has little control over the independent Federal Reserve, including limitations on removing the chair. However, Mr Trump has applied public pressure where he can to force Mr Powell’s hand, or push him out.

On Thursday, Mr Trump arrived at the new Federal Reserve building site in Washington DC, saying he wanted to come down to check what was going on, taking with him a piece of paper with a new sky-high figure for total costs of the build.

“We’re just taking a look at what’s happening,” Mr Trump said.

“It’s a tough construction job. A lot of expensive work.”

Mr Trump was accompanied by Republican Senator Tim Scott, from South Carolina, who is also the chair of the Senate Banking Committee.

“One of the reasons we wanted to see it was the overruns of the expenses,” Senator Scott said.

“We wanted to figure out why.”

Mr Trump said he was “taking a look” because of new figures, which Mr Powell appeared unaware of at first.

“It looks like it’s about $US3.1 billion,” Mr Trump said, as Mr Powell began shaking his head.

“It’s went up a little bit, or a lot. So the $2.7 is now $3.1,” Mr Trump added.

Mr Powell quickly responded, “I’m not aware of that, Mr President. I haven’t heard that from anyone at the Fed.”

Mr Trump then handed Mr Powell a folded-up piece of paper, something he claimed was from the Fed.

“This came from us?” Mr Powell asked.

“Yes,” Mr Trump said, adding “I don’t know who does that”.

It took Mr Powell around five seconds to quickly scan a document he had not seen before he fact-checked the US President in front of the media, pointing out the error in his calculations.

“You’re including the Martin renovation. You just added in a third building,” Mr Powell said.

“I know, it’s a building that’s being built,” Mr Trump responded.

However, Mr Powell refused to accept the President’s narrative that costs had blown out by an additional $US400m.

“No, it (the Martin renovation) was built five years ago. We finished Martin five years ago,” Mr Powell said.

“It’s part of the overall...” Mr Trump began, dismissing Mr Powell’s explanation.

“It’s not new,” Mr Powell reasserted.

Mr Trump attempted to take a new course with Mr Powell over the costs, cornering him on possible future cost blow-outs.

“We’re going to take a look, we’re going to see what’s happening,” Mr Trump said.

“Do you expect any more additional cost overruns?” he asked the Fed chair.

Mr Powell said the Fed didn’t “expect” cost overruns, but was “ready” if they arose. “We have a little bit of a reserve that we may use. But, no,” he added.

In classic Trump-style, the US President then retook control of the media event, taking off his white hard hat, saying it was nice to take it off when “we’re not under too much danger”.

The US President said that as a real estate developer, if he had a project manager who was operating over budget, he would “fire them”.

“I’d like to see it get finished. In many ways, it’s too bad it started, but it did start and it’s been under construction for a long time,” Mr Trump said.

Asked by a journalist what Mr Powell could say to the US President to get him to “back off” from criticism, Mr Trump was clear.

“Well, I’d love him to lower interest rates, other than that, what can I tell you?”

Can Donald Trump fire Jerome Powell?

The Federal Reserve Act of 1913, which created the central bank, says that members of the Board of Governors, including the Fed chief, can be “removed for cause by the president”.

But the law does not define “cause” or lay out any standard or procedures for removal.

No president has ever removed a Fed board member, and the law has never been tested in court.

- With Reuters