Jerome Powell fact-checking Trump has gone viral. What's the backstory of their feud?

Australia Broadcast Center

26-07-2025

It's been likened to a scene in comedy series The Office — US President Donald Trump being fact-checked by a disgruntled man in a suit and a hard hat.
But there's more to awkward exchange than a new meme format.
Here's the backstory of the video and why the pair's disagreement speaks to a serious issue in the US.
That's Jerome Powell, the chair of the US Federal Reserve.
The US Federal Reserve — which is often called "the Fed" for short — is the American equivalent to the Reserve Bank of Australia (RBA).
It's America's central bank, an institution tasked with regulating the finance sector, keeping the US economy in check and tackling inflation.
And part of that role is setting the target range for what's called the federal funds rate — a figure that influences the interest rates US banks charge customers.
The key thing about the Fed is that it's a separate entity from the US government, so it's not subject to the whims of whatever party is in power.
Mr Trump and Mr Powell are touring the Federal Reserve Board building, which is currently undergoing renovations, in Washington DC.
This tour came after Mr Trump's administration criticised the renovation project as "ostentatious".
The long-running renovation project was originally costed at $US1.9 billion ($2.9 billion), but the Fed says that went to $US2.5 billion.
During the tour, Mr Trump said the project's cost "went up a little or a lot" and was costing "about $US3.1 billion".
But Mr Powell shook his head, saying he had not heard those figures from the Fed.
Mr Trump then handed Mr Powell a piece of paper.
"Are you including the Martin renovation?" Mr Powell said.
"You just added in a third building, is what that is. That's a third building."
"It's a building that's being built," Mr Trump said.
"No, it was built five years ago," Mr Powell said.
The awkward moment happened before a pack of reporters, so footage of the exchange quickly spread.
Reposts of the video clocked up hundreds of thousands of views on X.
Meanwhile, a frame of Mr Powell examining the figures became a meme format:
And the virality of the moment was not helped by this interaction between the two:
Mr Trump wants Mr Powell to lower the federal funds rate so that interest rates will go down in the US.
In an Australian context, that would be equivalent to the prime minister asking the governor of the RBA to lower interest rates.
Since April, Mr Powell has warned that Trump's policies, particularly on tariffs, could undermine the economy.
He said the tariff levels were "significantly larger than anticipated" and that they could result in both lower growth and higher inflation.
This would make it difficult for the Fed to react and prohibit a rate cut.
In response, Mr Trump launched a tirade and called the chair a "major loser".
During the heated exchange this week, Mr Trump pressed him again on lowering interest rates, telling him to "do the right thing" and slash them by 3 percentage points or more.
Donald Trump has repeatedly suggested that he would "fire" Mr Powell.
The Federal Reserve Act of 1913, which created the central bank, says that members of the Board of Governors, including the Fed chief, can be "removed for cause by the president".
But the law does not define "cause" or lay out any standard or procedures for removal. No president has ever removed a Fed board member, and the law has never been tested in court.
Several federal laws shielding members of other agencies from being removed by the president without cause say that "cause" can include neglect of duty, malfeasance, and inefficiency.
If Mr Powell is fired and sues, those laws could be a guide for courts to determine if Mr Trump had cause to remove him.
Last week, Mr Trump said Mr Powell had kept rates too high and would be out in eight months.
"I think he's done a bad job, but he's going to be out pretty soon," he said.
US Treasury Secretary Scott Bessent on Monday said the entire Federal Reserve needed to be examined as an institution and whether it had been successful.
Mr Bessent, speaking with US media, declined to comment on a report that he had advised President Donald Trump not to fire Fed chair Jerome Powell.
He said it would be the president's decision.
But he said the institution should be reviewed, citing what he called the Fed's "fear-mongering over tariffs".
He said that there had been little, if any, inflationary effect so far.
Following his visit, the president walked back his comments and said that he would like the chair to resign but it would disrupt the markets if he were to remove him.