In an unexpected turn of events, President Donald Trump has announced that he will not be firing Federal Reserve Chairman Jerome Powell, despite having a history of public disagreements and previously urging Powell to resign. The declaration came on Thursday as Trump toured the Federal Reserve's headquarters in Washington D.C., which is currently undergoing renovations.
The relationship between Trump and Powell has been strained, as the President has been an outspoken critic of Powell's leadership, especially concerning interest rates. During a media briefing at the renovation site, a reporter questioned Trump on how he would handle a project manager who allowed costs to balloon, to which Trump responded, "I’d fire them." However, he refrained from directing this approach towards Powell, stating, "I just would like to see it get finished."
The cost of the Federal Reserve's headquarters renovation has been a point of contention, with Trump highlighting a rise in the budget from $2.7 billion to $3.1 billion. Powell appeared bewildered by the figure, stating he was not aware of the increase, a moment that underscored the ongoing tensions between the two figures.
This announcement is particularly notable given Trump’s previous stance, where he had called for Powell's immediate resignation after allegations of lying to Congress and non-compliance with government oversight regulations. Trump's decision not to fire Powell aligns with his assurance that there was "no tension" during their private meeting and his belief that Powell will "do the right thing."
The President's remarks are a significant shift from earlier this month when Russel Vought, the director of the Office of Management and Budget, sent Powell a letter expressing the President's concerns over the Federal Reserve's management. The letter suggested that Powell may have violated the law and critiqued the expensive overhaul of the Fed's D.C. headquarters.
Powell, who was nominated by Trump and assumed the chairmanship of the Federal Reserve in February 2018, has faced numerous challenges during his tenure, including navigating the economy through a period of volatility and responding to political pressures.
As the news spreads, it raises questions about the relationship between the White House and the Federal Reserve, the impact of the administration's fiscal policies, and the independence of the central bank. The evolution of Trump's stance on Powell's role as Fed Chair will likely continue to be a subject of interest and analysis as it reflects broader economic and political undercurrents.
