
Powell defends Fed renovation amid Trump criticism
'The project is large in scope because it involves the renovation of two historic buildings on the National Mall and that were first constructed in the 1930s,' Powell wrote in a Thursday letter to Office of Management and Budget (OMB) Director Russell Vought. 'While periodic work has been done to keep these buildings occupiable, neither building has seen a comprehensive renovation since they were first constructed.'
'Both buildings were in need of significant structural repairs and other updates to make the buildings safe, healthy, and effective places to work, including the removal of asbestos and lead contamination, complete replacement of antiquated systems such as electrical, plumbing, heating, ventilation, and air conditioning, as well as fire detection and suppression systems,' he added.
Trump administration officials have hammered Powell in recent weeks over his refusal to lower interest rates amid tariff uncertainty. Vought, earlier this month, questioned the Fed chair's leadership while claiming the projects in question were mismanaged resulting in a tab 'roughly $700 million over its initial cost.'
'While continuing to run a deficit since FY23 (the first time in the Fed's history), the Fed is way over budget on the renovation of its headquarters,' he wrote in a July 10 post on social platform X.
'Now up to $2.5 billion, roughly $700 million over its initial cost,' the OMB director added.
He also noted that the perceived discrepancies require 'additional oversight' by his office and the National Capital Planning Commission.
Powell countered the argument, saying the central bank already received feedback and approval from NCPC on the project proposals submitted in 2020 and 2021.
'Although the Board is not generally subject to the direction of NCPC with respect to its building projects, we voluntarily collaborated with the NCPC and benefitted from robust and collaborative engagement with the commission in earlier stages of the project,' he wrote in his letter to Vought.
'The project is proceeding in accordance with the plan that the NCPC approved in September 2021. Since the plan's approval by the NCPC, the Board has made a small number of design changes to scale back or eliminate certain elements and has added no new elements,' the Fed chief continued. 'These changes were intended to simplify construction and reduce the likelihood of further delays and cost increases.'
The back-and-forth comes as President Trump has threatened to ' soon ' fire Powell over his refusal to lower interest rates, with the idea floated that he could replace him with Treasury Secretary Scott Bessent.
However, some lawmakers have raised concerns with such a move, citing a potential impact on the markets.
'I do not believe a president, any president, has the authority to fire the Federal Reserve chair,' said Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, which has jurisdiction over the Fed.
'I believe strongly in the independence of the Federal Reserve. Some countries in the world don't have independent central banks,' he continued. 'Ask Turkey how that's been working out for them. At one point Turkey had inflation at 30 percent.'
Sen. Thom Tillis (R-N.C.), another member of the Banking Committee, has also warned that firing Powell would send a 'shock wave' through the economy.
'It would be a colossal mistake,' he said.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
9 minutes ago
- Yahoo
Asian markets gain, with Japan's Nikkei up more than 3%, lifted by deal on Trump's tariffs
TOKYO (AP) — Asian shares rallied on Wednesday, with Tokyo's benchmark Nikkei 225 index up more than 3% after Japan and the U.S. announced a deal on President Donald Trump's tariffs. The agreement as announced calls for a 15% import duty on goods imported from Japan, apart from certain products such as steel and aluminum that are subject to much higher tariffs. That's down from the 25% Trump had said would kick in on Aug. 1 if a deal was not reached. 'This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it,' Trump posted on Truth Social, noting that Japan was also investing 'at my direction' $550 billion into the U.S. He said Japan would 'open' its economy to American autos and rice. Hong Kong's Hang Seng jumped 1.1% to 25,397.81, while the Shanghai Composite index gained 0.8% to 3,608.58. Australia's S&P/ASX 200 edged up 0.6% to 8,731.90 and the Kospi in South Korea edged 0.1% higher to 3,172.10. 'President Trump has signed two trade deals this week with the Philippines and Japan which is likely to keep market sentiment propped up despite deals with the likes of the EU and South Korea remaining elusive, for now at least,' Tim Waterer, chief market analyst at Kohle Capital Markets, said in a report. There was a chorus of no comments from the Japanese automakers, despite the latest announcement, including Toyota Motor Corp., Honda Motor Co and Nissan Motor Corp. Japanese companies tend to be cautious about their public reactions, and some business officials have privately remarked in off-record comments that they hesitate to say anything because Trump keeps changing his mind. The Japan Automobile Manufacturers' Association also said it had no comment, noting there was no official statement yet. Japan's Prime Minister Shigeru Ishiba welcomed the agreement as beneficial to both sides. Wall Street inched to another record on Tuesday following some mixed profit reports, as General Motors and other big U.S. companies gave updates on how much Trump's tariffs are hurting or helping them. The S&P 500 added 0.1% to the all-time high it had set the day before, closing at 6,309.62. The Dow Jones Industrial Average rose 0.4% to 44,502.44. The Nasdaq composite slipped 0.4% from its own record, to 20,892.68. General Motors dropped 8.1% despite reporting a stronger profit for the spring than analysts expected. The automaker said it's still expecting a $4 billion to $5 billion hit to its results in 2025 from higher tariffs and that it hopes to mitigate 30% of that. GM also said it will feel more pain because of tariffs in the current quarter than it did during the spring. That helped to offset big gains for some homebuilders after they reported stronger profits for the spring than Wall Street had forecast. D.R. Horton rallied 17%, and PulteGroup jumped 11.5%. That was even as both companies said homebuyers are continuing to deal with challenging conditions, including higher mortgage rates and an uncertain economy. So far, the U.S. economy seems to be powering through the uncertainty created by Trump's on-and-off tariffs. Many of Trump's proposed taxes on imports are currently on pause, and the next big deadline is Aug. 1. Talks are underway on possible trade deals with other countries that could lower the stiff proposals before they kick in. Trump said he reached a trade agreement with the Philippines following a meeting Tuesday at the White House, that will see the U.S. slightly drop its tariff rate for the Philippines without paying import taxes for what it sells there. In the bond market, Treasury yields sank as traders continue to expect the Federal Reserve to wait until September at the earliest to resume cutting interest rates. The yield on the 10-year Treasury eased to 4.34% from 4.38% late Monday. In other dealings early Wednesday, U.S. benchmark crude oil gained 14 cents to $65.45 a barrel. Brent crude, the international standard added 18 cents to $68.77 a barrel. In currency trading, the U.S. dollar inched up to 146.80 Japanese yen from 146.64 yen. The euro cost $1.1745, down from $1.1754. ___ AP Business Writer Stan Choe contributed. Yuri Kageyama, The Associated Press Sign in to access your portfolio
Yahoo
9 minutes ago
- Yahoo
Texas lawmakers begin review of catastrophic floods that killed at least 135
AUSTIN, Texas (AP) — Texas lawmakers on Wednesday were set to begin reviewing the July 4 floods that killed at least 135 people, a disaster that put local officials under scrutiny over why residents along the Guadalupe River did not receive more warnings. The catastrophic floods in the Texas Hill Country and a partisan redrawing of U.S. House maps, aimed at giving Republicans more winnable seats in the 2026 elections, are two major issues in a 30-day special session that is already off to a combative start. Democrats want to address flood relief and new flood warning systems before taking votes on new congressional maps sought by President Donald Trump. They have not ruled out a walkout in a bid to derail the redistricting, which they have slammed as a partisan power grab. State and county emergency response officials are scheduled to testify on Wednesday, but no officials from Kerr County, the area most hard-hit by the floods, are expected to appear. Lawmakers have filed bills to improve early warning systems and emergency communications and to provide relief funding. Kerr County, where 27 campers and counselors, most of them children, were killed at Camp Mystic, an all-girls Christian summer camp, does not have a warning system along the river after several missed opportunities by state and local agencies to finance one. Three people remain missing. At one point, county officials said more than 170 people were unaccounted for. Lawmakers are scheduled to visit Kerrville on July 31 to hear from residents. Democrats have left open the possibility of filibusters or walking out in the coming weeks to block the proposed congressional map redraw. On Monday, most of the party's members in the House signed a letter to the speaker stating that they would not engage in any work before addressing flood relief. But Democrats have few paths to resistance as the minority party in both chambers. Republican Attorney General Ken Paxton has threatened to arrest those who attempt to walk out on top of the $500 a day fines lawmakers face for breaking a quorum. ___ Lathan is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Solve the daily Crossword


The Hill
10 minutes ago
- The Hill
Asian markets gain, with Japan's Nikkei up more than 3%, lifted by deal on Trump's tariffs
TOKYO (AP) — Asian shares rallied on Wednesday, with Tokyo's benchmark Nikkei 225 index up more than 3% after Japan and the U.S. announced a deal on President Donald Trump's tariffs. The agreement as announced calls for a 15% import duty on goods imported from Japan, apart from certain products such as steel and aluminum that are subject to much higher tariffs. That's down from the 25% Trump had said would kick in on Aug. 1 if a deal was not reached. 'This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it,' Trump posted on Truth Social, noting that Japan was also investing 'at my direction' $550 billion into the U.S. He said Japan would 'open' its economy to American autos and rice. Hong Kong's Hang Seng jumped 1.1% to 25,397.81, while the Shanghai Composite index gained 0.8% to 3,608.58. Australia's S&P/ASX 200 edged up 0.6% to 8,731.90 and the Kospi in South Korea edged 0.1% higher to 3,172.10. 'President Trump has signed two trade deals this week with the Philippines and Japan which is likely to keep market sentiment propped up despite deals with the likes of the EU and South Korea remaining elusive, for now at least,' Tim Waterer, chief market analyst at Kohle Capital Markets, said in a report. There was a chorus of no comments from the Japanese automakers, despite the latest announcement, including Toyota Motor Corp., Honda Motor Co and Nissan Motor Corp. Japanese companies tend to be cautious about their public reactions, and some business officials have privately remarked in off-record comments that they hesitate to say anything because Trump keeps changing his mind. The Japan Automobile Manufacturers' Association also said it had no comment, noting there was no official statement yet. Japan's Prime Minister Shigeru Ishiba welcomed the agreement as beneficial to both sides. Wall Street inched to another record on Tuesday following some mixed profit reports, as General Motors and other big U.S. companies gave updates on how much Trump's tariffs are hurting or helping them. The S&P 500 added 0.1% to the all-time high it had set the day before, closing at 6,309.62. The Dow Jones Industrial Average rose 0.4% to 44,502.44. The Nasdaq composite slipped 0.4% from its own record, to 20,892.68. General Motors dropped 8.1% despite reporting a stronger profit for the spring than analysts expected. The automaker said it's still expecting a $4 billion to $5 billion hit to its results in 2025 from higher tariffs and that it hopes to mitigate 30% of that. GM also said it will feel more pain because of tariffs in the current quarter than it did during the spring. That helped to offset big gains for some homebuilders after they reported stronger profits for the spring than Wall Street had forecast. D.R. Horton rallied 17%, and PulteGroup jumped 11.5%. That was even as both companies said homebuyers are continuing to deal with challenging conditions, including higher mortgage rates and an uncertain economy. So far, the U.S. economy seems to be powering through the uncertainty created by Trump's on-and-off tariffs. Many of Trump's proposed taxes on imports are currently on pause, and the next big deadline is Aug. 1. Talks are underway on possible trade deals with other countries that could lower the stiff proposals before they kick in. Trump said he reached a trade agreement with the Philippines following a meeting Tuesday at the White House, that will see the U.S. slightly drop its tariff rate for the Philippines without paying import taxes for what it sells there. In the bond market, Treasury yields sank as traders continue to expect the Federal Reserve to wait until September at the earliest to resume cutting interest rates. The yield on the 10-year Treasury eased to 4.34% from 4.38% late Monday. In other dealings early Wednesday, U.S. benchmark crude oil gained 14 cents to $65.45 a barrel. Brent crude, the international standard added 18 cents to $68.77 a barrel. In currency trading, the U.S. dollar inched up to 146.80 Japanese yen from 146.64 yen. The euro cost $1.1745, down from $1.1754. ___