Trump to tour Federal Reserve as war on Chair Powell escalates
The White House has framed the visit to tour the renovation of two Fed buildings, whose costs have swelled from an initial $1.9 billion to roughly $2.5 billion. Some believe the Trump administration is attacking the renovation costs as a pretext to fire Mr Powell.
Presidential visits to the Federal Reserve are rare, with the commander-in-chief generally taking precautions to preserve the central bank's autonomy. The last president to visit the Fed was George W Bush in 2006 when he swore in Ben Bernanke as chair.
Other Trump aides are expected to tour the Fed's renovations with him. It was not clear if Mr Trump will meet Mr Powell.
'The Federal Reserve is working with the White House to accommodate their visit,' a Federal Reserve spokesperson told The National.
Mr Trump has grown increasingly frustrated with the Fed's extended rate-cut pause. The US central bank has held its interest target rate range steady at 4.25 to 4.50 per cent this year due to uncertainty surrounding tariffs.
Recent data have shown that the effects of tariffs are beginning to creep into the US economy. The Labour Department reported last week that inflation had ticked up in June. Underlying data showed that prices in everyday items such as household appliances, toys and apparel are being passed down to consumers.
Some economists, however, argue that the Fed should begin cutting rates soon to help protect the labour market. Unlike most central banks, the Fed holds a dual mandate of price stability and full employment.
The visit also comes less than a week until the Fed's next meeting, where it is again expected to hold rates steady.
But Mr Trump has repeatedly called for the Fed to lower interest rates by as much as 3 percentage points to around 1.25 per cent. He has said doing so could help service the US debt, a concept known as fiscal dominance.
Projections released by the Fed in June signalled that the central bank expects to cut rates twice this year, although it is unclear when. Traders currently expect the Fed to resume rate cuts in September, according to CME Group data.
Mr Powell has repeatedly said Mr Trump does not have the legal authority to fire him. And such a move would likely lead to a financial crisis as markets would question the independence of future rate moves by the central bank.
Mr Powell has also said he will not resign before his term as Fed Chair expires in May 2026.
The bond market was mostly subdued ahead of Mr Trump's visit, with the yield on the 10-year Treasury up 1 basis point at 4.398 per cent.
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