Trump takes on Fed: Personal visit escalates rate cut pressure
President Donald Trump plans to step foot in the Federal Reserve on Thursday as his allies scrutinize its expensive building renovations, a highly personal and confrontational escalation of his campaign to pressure the central bank to slash interest rates.
Trump administration officials have used concerns about the building overhaul to cast doubt on Fed Chairman Jerome Powell's decision-making.
They were scheduled to inspect the site on Thursday, and the White House announced late Wednesday that the president would also be visiting.
The visit reflects Trump's disregard for the traditional independence of the Fed, which plays a foundational role in the American economy by setting monetary policy that is supposed to be free of political influence.
While previous presidents have criticized the Fed's decisions, Trump's sustained campaign is an unusual and, his critics say, dangerous departure from the norm.
He has called on Powell to resign, insulted him repeatedly and suggested he could be fired.
More recently, Trump has said he has no plans to oust Powell, which could be illegal. Pushing Powell out also would send shockwaves through global markets, potentially having the opposite effect that Trump wants as he pushes for lower borrowing costs.
Trump, a Republican, appointed Powell during his first term, and President Joe Biden, a Democrat, extended his tenure. Powell's term doesn't end until next May, and he's previously insisted that he will serve until then.
Not everyone in Trump's administration agrees with the president's contention that Powell needs to resign.
'There's nothing that tells me that he should step down right now,' said Treasury Secretary Scott Bessent, whom Trump has floated as a potential replacement for Powell, in a recent interview with Fox Business. 'He's been a good public servant.'
Trump has criticized Powell for months because the chair has kept the short-term interest rate the Fed controls at 4.3% this year, after cutting it three times last year.
Powell says the Fed wants to see how the economy responds to Trump's sweeping tariffs on imports, which Powell says could push up inflation.Powell's caution has infuriated Trump, who has demanded the Fed cut borrowing costs to spur the economy and reduce the interest rates the federal government pays on its debt.
Trump will likely be disappointed again soon. A key Fed committee is expected to keep rates where they are when it meets next week.
The Fed has been renovating its Washington headquarters and a neighboring building. With some of the construction occurring underground and as building materials have soared in price after inflation spiked in 2021 and 2022, the estimated cost has ballooned from $1.9 billion to about $2.5 billion.
When asked last week if the costly rebuilding could be grounds to fire Powell, Trump said, 'I think it sort of is.' 'When you spend $2.5 billion on, really, a renovation,' Trump said, 'I think it's really disgraceful.'
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Qatar Tribune
20 hours ago
- Qatar Tribune
Donald Trump, Powell clash over renovation costs during tense Fed visit
Agencies After months of sharp criticism, President Donald Trump took his feud with Federal Reserve Chair Jerome Powell to the Fed's front door on Thursday, publicly rebuking him over the escalating costs of a long-planned building project. Powell pushed back, disputing the president's latest price tag as incorrect. Wearing hard hats and grim faces, standing in the middle of the construction project, Trump and Powell addressed the cameras. Trump charged that the renovation would cost $3.1 billion, much higher than the Fed's $2.5 billion figure. Powell, standing next to him, shook his head. The Fed chair, after looking at a paper presented to him by Trump, said the president was including the cost of renovating a separate Fed building, known as the Martin building, which was finished five years visit represented a significant ratcheting up of the president's pressure on Powell to lower borrowing costs, which Trump says would accelerate economic growth and reduce the government's borrowing costs. Presidents rarely visit the Fed's offices, though they are just a few blocks from the White House, an example of the central bank's independence from day-to-day politics. 'We have to get the interest rates down,' Trump said later after a short tour, addressing the cameras this time without Powell. 'People are pretty much unable to buy houses.' Trump is likely to be disappointed next week, however, when Fed officials will meet to decide its next steps on interest rates. Powell and other officials have signaled they will likely keep their key rate unchanged at about 4.3%. However, economists and Wall Street investors expect the Fed may start cutting rates in September. Trump did step back a bit from some of his recent threats to fire Powell before his term ends May 26. Asked if the rising costs of the Fed's renovation, estimated in 2022 to cost $1.9 billion, was a 'fireable offense,' Trump said, 'I don't want to put this in that category.' 'To do that is a big move, and I don't think that's necessary,' Trump added. 'I just want to see one thing happen, very simple: Interest rates come down.' The Fed allowed reporters to tour the building before the visit by Trump, who, in his real estate career, has bragged about his lavish spending on architectural accoutrements that gave a Versailles-like golden flair to his buildings. On Thursday, reporters wound through cement mixers, front loaders, and plastic pipes as they got a close-up view of the active construction site that encompasses the Fed's historic headquarters, known as the Marriner S. Eccles building, and a second building across 20th Street in Washington. Fed staff, who declined to be identified, said that greater security requirements, rising materials costs and tariffs, and the need to comply with historic preservation measures drove up the cost of the project, which was budgeted in 2022 at $1.9 billion. The staff pointed out new blast-resistant windows and seismic walls that were needed to comply with modern building codes and security standards set out by the Department of Homeland Security. The Fed has to build with the highest level of security in mind, Fed staff said, including something called 'progressive collapse,' in which only parts of the building would fall if hit with explosives. Sensitivity to the president's pending visit among Fed staff was high during the tour. Reporters were ushered into a small room outside the Fed's boardroom, where 19 officials meet eight times a year to decide whether to change short-term interest rates. The room, which will have a security booth, is oval-shaped, and someone had written 'oval office' on plywood walls. The Fed staff downplayed the inscription as a joke. When reporters returned to the room later, it had been painted over. During the tour, Fed staff also showed the elevator shaft that congressional critics have said is for 'VIPs' only. Powell has since said it will be open to all Fed renovation includes an 18-inch (45-cm) extension so the elevator reaches a slightly elevated area that is now accessible only by steps or a ramp. A planning document that said the elevator will only be for the Fed's seven governors was erroneous and later amended, staff said. Plans for the renovation were first approved by the Fed's governing board in 2017. The project then wended its way through several local commissions for approval, at least one of which, the Commission for Fine Arts, included several Trump appointees. The commission pushed for more marble in the second of the two buildings the Fed is renovating, known as 1951 Constitution Avenue, specifically in a mostly glass extension that some of Trump's appointees derided as a 'glass box.' Fed staff also said tariffs and inflationary increases in building material prices drove up costs. Trump in 2018 imposed a 25% duty on steel and 10% on aluminum. He increased them this year to 50%. Steel prices are up about 60% since the plans were approved, while construction materials costs overall are up about 50%, according to government data. Fed staff also pointed to the complication of historic renovations – both buildings have significant preservation needs. Constructing a new building on an empty site would have been cheaper, they said. As one example, the staff pointed reporters to where they had excavated beneath the Eccles building to add a floor of mechanical rooms, storage space, and some offices. The Fed staff acknowledged such structural additions underground are expensive, but said it was done to avoid adding HVAC equipment and other mechanics on the roof, which is historic. The Fed has previously attributed much of the project's cost to underground construction. It is also adding three underground levels of parking for its second building. Initially the central bank proposed building more above ground, but ran into Washington, D.C.'s height restrictions, forcing more underground construction.
Qatar Tribune
20 hours ago
- Qatar Tribune
US universities still a valuable investment for Chinese families
Agencies Jason Lin of Xiamen surprised his mother this year by applying to 10 undergraduate schools in the United States and receiving a US$15,000 annual scholarship from Brandeis University near Boston. There, he intends to earn a master's degree in economics over the next five years. But to his mother, it's like he's venturing into the wild, compounding the anxiety parents often feel when their adult children leave the nest. She's afraid of 'instability' in the US. And Lin, 19, has concerns that even a traffic ticket could get him deported. But he weighed the pros and cons, laid it all on the table for his mother, and decided on Brandeis in time for the coming fall semester. Despite a sharp increase in US-China tensions this year, Chinese students such as Lin are still pursuing American higher education much as they have in the past, but they are being more selective than before, according to applicants and university officials. 'Basically, the thought of going to the States came to me when I was in ninth grade,' Lin explained. He expects more academic freedom in the US than in other countries and recalls the 'vibe' in New York when he visited as a tourist. Well-known schools, highly ranked programmes associated with the majors of students' choices, and flexible financial aid packages have become bigger if the university campus is located in a relatively safe American city, it gets bonus points in the selection process among Chinese applicants. 'The US does have the pre-eminent global research universities, for now at least,' said Rory Truex, an assistant professor with Princeton University's Department of Politics. 'And many students are willing to take the risks to get access to that opportunity.' Some public and private universities across the US are expecting the number of students from China during the 2025-2026 term to be comparable to enrolment figures over the past five years. The University of New Mexico, a public school specialising in STEM and health-related disciplines, has 89 Chinese students on campus and expects 20 more this autumn, putting the total higher than at the same time last year or in 2023, according to campus communications director Steven Carr. The university welcomed 21 new Chinese students last autumn, and 16 at the start of the 2023 academic nationals appreciate that the school has affordable tuition; offers scholarships for undergraduates and graduate students; and features hands-on learning opportunities in graduate programmes, Carr said. He said the campus can sometimes offer 'resources tailored to international students'. US Secretary of State Marco Rubio said in May that the United States would start 'aggressively' revoking visas issued to Chinese students and would 'enhance scrutiny' of new applications. The administration of US President Donald Trump was on track after its first 100 days to deport about half a million people this year, according to the Migration Policy Institute think tank. Singapore has been tipped to attract more Chinese students due to perceived instability in the US. In June, Trump announced that the US would indeed allow Chinese students into American universities, as part of a wider deal with China. However, many students and their parents were already on high alert over reports of students being denied visas, being detained at immigration checkpoints, or being shown hostility in America amid bilateral spats over trade and competing geopolitical ambitions. A pivotal moment came in May, when the Department of Homeland Security took steps to restrict the entry of new international students and considered revoking existing visas for current Harvard students, citing national security. But a federal judge blocked the government's move to bar foreign students and scholars from entering the US to study or work at Harvard, and the Ivy League school made that clear on its website. The University of California, San Francisco, admitted eight students from abroad for the upcoming academic year to its nationally ranked pharmacy graduate school, and five were Chinese nationals. One more was admitted from China but could not get a US visa. Last year, just four out of the School of Pharmacy's 127 students were from other countries. Applications from China, a perennial chief source of applicants, have shown no sign of slowing, said the school's admissions director, Joel Gonzalez. 'For the most part … when you look at the number of international students, probably the majority of them are going to be from China,' Gonzales said at his office in a tower of classrooms and university-run medical wards up the hill from San Francisco's Golden Gate Park and a city bus ride from Chinatown. Reasons for their applications 'could be the diversity of San Francisco versus somewhere in the [US] Midwest that might not be as inviting to a student in China', he said. 'And we're the top-ranked programme in California, so I can't help but think that those variables come into play.'It was another well-ranked programme, Human Computer Interaction, that drew Zhou Yubo to the University of Michigan for his graduate studies in August. Now he is just waiting to see whether he gets the necessary student visa, having already waited more than six weeks. The 22-year-old, with a tech-related undergraduate degree and two previous stays in the US, said he believed the campus in Ann Arbor would be 'a good place to study hard', due to what he sees as a lack of entertainment options compared with other university towns. Personal careers are now more important to US-bound Chinese students than visa issues or geopolitical pressures, said Perry Link, a comparative literature-Chinese professor at the University of California, Riverside. 'The graduate students, who are mostly in STEM fields, are interested in joining the international quest to advance scientific learning in universities or companies in the US,' Link said. 'Undergraduates are usually full-tuition-paying students from wealthy or fairly wealthy backgrounds in China,' he said. 'A lot of them study business or accounting and are looking for careers in the US or in family-affiliated firms back in China. They like to position themselves to do well in both systems – Chinese and American.' Another Ivy League school, Cornell University, has similarly found little change this year from last, despite some Chinese students having a little trouble getting visas, said Wendy Wolford, vice-provost for international affairs. Cornell lets students without visas start their studies at one of Cornell's three 'top' partner schools in other countries, she said. The California State University campus in the inland college town of Chico counts Chinese nationals as 3.5 per cent of the international student body, public relations director Andrew Staples said. The relatively small, crime-free city of 101,000 people is a selling point, he added. Students from second- and third-tier Chinese cities may go for the state school's relatively low tuition and living costs, compared with schools in bigger American urban areas, Staples said. 'Chico's setting as a university town offers an accessible and immersive American college experience that appeals to students and families alike,' he said.
Qatar Tribune
20 hours ago
- Qatar Tribune
How might Trump's tariffs hurt Brazil?
Agencies With Donald Trump's punitive tariffs against Brazil poised to take effect within days, Latin America's largest economy is bracing for a virtual embargo on its planes, grains, and crude oil. The mercurial US president has penciled in 50 percent tariffs on Brazilian goods starting August 1, swatting aside centuries-old ties and a US trade surplus which Brasilia put at $284 million in 2024. Trump has not attempted to hide the political motivation behind the sanctions - citing a judical 'witch hunt' against his right-wing ally, ex-president Jair Bolsonaro. The former artillery officer is on trial, accused of plotting a coup after losing re-election in 2022 to now-President Luiz Inacio Lula da Silva. While Brazil's seasoned trade diplomats rush to avoid a damaging trade war that would hurt the country's already slow-growing economy, key sectors are bracing for impact. Brazil is the world's largest exporter of beef, chicken, soybeans, corn, coffee, sugar and orange juice. Its main exports to the United States are crude oil, semi-finished iron and steel products, coffee and aircraft. The agriculture sector alone is projecting losses of $5.8 billion, according to the Confederation of Agriculture and Livestock. Other sectors, such as aeronautics, fisheries and defense, allocate more than half of their exports to the US market and may suffer 'an impact on jobs,' according to economist Felipe Salto, former secretary of finance of Sao Paulo state. In the aeronautics sector, the tariff hike is 'almost an embargo' and may lead to a 'workforce adjustment similar to the COVID-19 pandemic,' according to Francisco Gomes Neto, CEO of Brazil's Embraer, the world's third-largest aircraft manufacturer. Trump has become notorious for changing his mind on tariff rates, for stalling deadlines, and for claiming epic deals that fail to materialize. He may yet change his mind again. But in Brazil, the impact of his threats is already being felt. There is a preventive suspension of shipments of meat, fruit, fish, and grains, according to industry sources. About 77,000 tons of fruit are sitting in containers awaiting a diplomatic resolution before they spoil, according to the Brazilian Association of Fruit Export Producers. New shipments of beef to the United States are 'under analysis' as they would only arrive after August 1, the powerful Brazilian Beef Association said. The political nature of the spat seems to make a last-minute deal less likely. Brazil has insisted the case against Bolsonaro will go ahead unless prosecutors decide otherwise. Trump 'doesn't want to talk,' leftist Lula lamented recently, reiterating that his Plan A is to continue 'negotiating.' Lula has tasked Vice President Geraldo Alckmin with reaching out to the White House. But a Brazilian negotiating proposal sent in May has received no response, according to Brasilia. Ricardo Alban, president of the National Confederation of Industry, believes Brazil will continue trying to negotiate as long as possible. Its 'largest bilateral trade relationship in manufactured products is with the United States,' he said. As a Plan B, Lula's government is already considering offering credit lines for tariff-hit companies. In the longer term, Brazil is trying to 'restructure' its trade ties with countries beyond the United States, top government official Rui Costa said recently. The European Union, Mexico, and Canada are all potential partners. When it comes to increasing exports to China, economists see a more difficult path for some sectors. 'It's easier to redirect oil or coffee production to other countries than aircraft parts,' said Marcos Mendes of the Insper research center.
