Fed prepares for Trump visit as tensions with White House escalate
'The Federal Reserve is working with the White House to accommodate their visit,' a Fed spokesperson said, confirming Trump's appearance, which was announced by the White House late on Wednesday.
The visit, scheduled for 4pm EDT (2000 GMT), comes less than a week before the Fed's 19 policymakers are due to meet to set interest rates. Markets expect no change to the current benchmark rate of 4.25 to 4.50 per cent, which has remained unchanged since December.
Trump has repeatedly demanded that Powell slash interest rates and has publicly considered firing him — though he recently said he had no plans to do so. On Tuesday, the president called Powell a 'numbskull'.
WHITE HOUSE TARGETS FED RENOVATION COSTS
The visit also comes as the Trump administration faces political pressure over its reversal on a promise to release Justice Department files related to the late sex offender Jeffrey Epstein. As scrutiny over that decision mounts, the White House has intensified its criticism of the Fed, particularly over cost overruns in the renovation of two historic buildings.
White House budget director Russell Vought claimed renovation costs were 'US$700 million and counting,' while Treasury Secretary Scott Bessent cited the central bank's operational losses as reason for greater oversight.
The Fed reported net losses of US$114.6 billion in 2023 and US$77.5 billion in 2024. The losses stem from the central bank's interest rate operations, including payments to banks that park excess reserves at the Fed.
The Fed, in response, said the renovation was its first major overhaul in nearly a century and had been hampered by unforeseen challenges including toxic material removal and rising material and labour costs. It posted supporting documents on its website and outlined its rationale in letters to lawmakers.
White House Deputy Chief of Staff James Blair and Senate Banking Committee Chair Tim Scott, a Republican, were expected to join Trump at the Fed on Thursday.
CRITICISM AND CENTRAL BANK INDEPENDENCE
While markets showed little immediate reaction to the news, with Wall Street trading higher and 10-year Treasury yields ticking up following strong jobless claims data, analysts noted the sensitive nature of the visit.
Trump's ongoing public pressure on Powell has previously rattled markets, raising concerns about potential political interference in monetary policy.
The president's appearance at the Fed contrasts with rare, more ceremonial visits by previous leaders. The last known visit by a sitting president was when George W. Bush attended the swearing-in of then-Chair Ben Bernanke.
Republican Senator Mike Rounds on Thursday said he saw no issue with Trump's visit but warned that Powell must remain independent.
'I think he has to maintain his independence. That's critical for the markets,' Rounds said, while acknowledging cost challenges in the Fed's renovation project. 'The more information the president can glean from this, probably the better off we are.'
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