The additional cost of renovating the Fed headquarters is a new pretext for the White House to discredit Jerome Powell, the owner of the American Central Bank.
Donald Trump holds a new pretext to discredit, even oust, Jerome Powell of the presidency of the Council of Governors of the Federal Reserve. At the war opened with the boss of the American central bank, the President of the United States and his advisers accuse Jerome Powell of wasting public money in a much more expensive renovation than expected, from the headquarters of the broadcast institute in Washington.
The project, launched in 2021, will cost some 2.5 billion dollars, 700 million more than the initial estimate. The Fed, stung to the live, explains the reasons for this slippage, but denies having lied to the congress on planning and execution of the site. It denies the construction of new elevators and new dining rooms for VIP, as well as new fountains and overwhelmed green roofs for a Washington federal building. Price of material prices, especially marble, as well as the more restrictive than expected asbestos, would explain the enormous additional cost.
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“Ostentatious renovation”
« The question that arises is that of the generosity with which Mr. Powell spends public funds and the fact that he systematically managed the Fed “Dare to declare Russell Vought, powerful director of the Management and Budget Office. “” Instead of trying to straighten the bar of the FED financial ship, you were right in front of the implementation of an ostentatious renovation of your headquarters in Washington “, Even wrote in a letter to Jerome Powell, this right arm of President Trump, architect of the reorganization of federal services.
The case will complicate the last months of Jerome Powell at the head of Fed. Its main mandate, that of president of the Council of Governors, expires in May 2026. Generally a successor was appointed in the months preceding the end of the mandate, so as to give the Senate time to confirm the nominé. However, the White House has already circulated better names of economists better arranged with regard to a drop in interest rates, which could replace Jerome Powell. The idea of weakening the latter, by accusing him daily of being ” idiot », « incompetent ” And to delay irresponsibly to lower your key rate, doubles a desire to assist it to resignation. The Supreme Court has indeed indicated that the President of the United States can only dismiss the patron of the Fed in case of embezzlement, and not in the event of disagreement on monetary policy.
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Market confidence
Aged 72, Jerome Powell retains the confidence of the markets and many leaders in the congress, attached to the principle of the independence of the Central Bank. Appointed by Donald Trump himself in 2017, Jerome Powell can stay at Fed as a simple governor until January 2028. He has been arguing for months that he is preferable to wait before changing the level of the Fed rate of the Fed, because the risk of inflation rebound is real, due to customs duties that are starting to repercussions.
