The Trump administration has ratcheted up its attacks on Federal Reserve Chairman Jerome Powell, with Office of Management and Budget Director Russ Vought taking the lead with accusations that Powell is trying to create a “palace” with the ongoing renovations at the central bank’s headquarters in Washington, DC.
Vought sent a letter to Powell yesterday claiming that he “had grossly mismanaged the Fed” and misled Congress during a recent hearing about the nature and budget of the headquarters renovations. Vought appeared on CNBC’s “Squawk Box” this morning to repeat his allegations.
“When you go to the nation’s mall, you see the construction of this palace,” Vought declared, claiming that Powell was responsible for “upwards of $2.5 billion massive cost overrun, and we want to make sure we have facts as to the largesse and the extent to which it’s overrun. I think it just points to the fundamental mismanagement of the Fed under the chairman.”
Vought’s agency has no oversight over the renovation project – that falls under the jurisdiction of the National Capital Planning Commission, which recently added three new members appointed by President Trump. When asked on “Squawk Box” if his concerns on the renovation costs were specifically tied to Powell’s decision not to cut the federal funds rate since Trump returned to the White House, Vought replied, “This certainly has to do with the fiscal mismanagement of the Fed, of which [interest rates] is one aspect of it. We are going to zoom in over the last several days on this. We have new commissioners at the National Capital Planning Commission who are asking very tough questions.”
A recent Supreme Court ruling stated that Fed officials cannot be fired by a president at will, although the new line of attack against Powell’s supervision of the renovations could be seen as a strategy to justify his removal. However, Republican leaders in Congress have yet to show interest in opening an investigation regarding the Fed renovations.
And while Trump has previously claimed he had no plans to fire Powell, he has engaged in a constant barrage of insults and putdowns against the Fed chairman regarding his competence and alleged political motivations. Vice President JD Vance, Commerce Secretary Howard Lutnick and Federal Housing Finance Agency Director Bill Pulte have echoed the president’s messaging, with Pulte making multiple calls for Powell’s resignation.
This is a bit odd. Usually Republicans have bent over and took it from the Fed and others. Democrats have been skilled at applying pressure to get what they want.