US President Donald Trump has suggested that Federal Reserve Chair Jerome Powell could be fired over a $2.5 billion renovation plan for the central bank’s headquarters. This escalates his recent attack against the central banker, as reported by CNN.Speaking to reporters, Trump said: “I think he’s terrible… But the one thing I didn’t see him as a guy that needed a palace to live in.” He added that talking to Powell was like “talking to a chair” because of his lack of personality.Trump criticised the cost of the planned renovations, saying: “I would have never guessed he would be spending two and a half billion dollars to build a little extension onto the Fed.” When asked if that justified firing Powell, Trump replied: “I think it sort of is.”Trump has repeatedly attacked Powell in recent months, demanding lower interest rates. However, the Federal Reserve argues that it has kept rates steady this year and decisions should be based on economic data.Economists and market leaders warn that undermining the Fed’s independence could have serious consequences. JPMorgan Chase CEO Jamie Dimon emphasised the importance of an independent central bank. “The independence of the Fed is absolutely critical … Playing around with the Fed can often have adverse consequences, absolutely opposite of what you might be hoping for,” Dimon said to reporters.Trump has admitted that his personal attacks have not succeeded in pressuring the Fed to cut rates. Recently, he has used the cost of the renovation as another line of criticism.Powell has asked the central bank’s inspector general to conduct an additional review of the renovation project. Last month, US senators questioned Powell about excessive spending during his semiannual monetary policy hearing.The renovation of the Federal Reserve’s headquarters in Washington, DC, was approved by its board in 2017. It was originally expected to cost $1.9 billion in 2019, but the cost has since risen to $2.5 billion.Trump has long directed his frustration at Powell by calling him with terms like “numbskull” and “moron.” Powell has stated publicly that the Fed would have likely cut rates already if not for the economic uncertainty caused by tariffs.
