Latest news with #PalaceofVersailles'
New York Post
18-07-2025
- Business
- New York Post
The Trump camp's tug of war over Fed Chair Jerome Powell's future
One minute it seems like Donald Trump is ready to fire Jerome Powell, the next minute he isn't. But it's not just the president who apparently can't make up his mind on the future of the Federal Reserve chair – it's his own staff, On The Money has learned. People with direct knowledge of the matter tell me that the administration's legal types and people inside the Treasury Department are divided over whether the president can pull the plug on Powell. 3 Jerome Powell's term ends in 10 months, but President Trump wants him gone closer to yesterday because he believes he's too cautious in cutting rates. Jack Forbes / NY Post Design Recall, Powell's term ends in 10 months, but Trump wants him gone closer to yesterday because he believes he's too cautious in cutting rates. Under the law, Trump can fire Powell for what's known as 'cause.' What Trump's inner circle is grappling with is what exactly constitutes 'cause' in a way that can withstand legal scrutiny. The 'Fire Powell' lawyers believes the president has a wide berth to interpret the 'for cause' clause in the Federal Reserve Act, the 1913 law that established the nation's central bank as a semi-independent agency of government to control the money supply while maintaining price stability and full employment. The president nominates the Fed chair for a four-year term, which requires Senate confirmation, but that term isn't guaranteed if he steps out of line, this faction argues. Trump could simply say Powell is unqualified for the job, having missed the inflation spike in 2021 before raising interest rates, and then cut them during the run up to the 2024 election – allegedly to help his Democratic opponent Kamala Harris. Trump could also argue that Powell is incompetent for not lowering interest rates now amid signs the economy is slowing and Trump's tariffs haven't led to a significant spike in inflation. 3 Under the law, Trump can fire Powell for what's known as 'cause.' What Trump's inner circle is grappling with is what exactly constitutes 'cause' in a way that can withstand legal scrutiny. AP Not so fast, say 'Keep Powell' proponents at the Treasury Department – including Treasury Secretary Scott Bessent. They believe 'for cause' means a serious breach of ethical conduct or law, sources tell On The Money. Not liking Powell's interest rate policy doesn't meet that standard, they argue. In fact, the Federal Reserve Act specifically preserves the Fed's independence from the president, which is why there's such a high 'for cause' bar to meet before you can ax the fed chairman, they would add. The $2.5 billion Fed office fiasco, as reported by The Post, with Powell accused by Trump allies of lying to Congress about the 'Palace of Versailles' opulence of the project, gets you closer to 'for cause.' But proving perjury as opposed to misspeaking or legalese is difficult. Plus, Powell wouldn't be the first bureaucrat to go over budget. 3 Powell is accused of lying to Congress about a $2.5 billion Fed renovation project. Getty Images If Trump did pull the trigger, the Treasury peeps are arguing, it would create a messy legal battle between Powell and the president. The Fed chair could refuse to leave, arguing that the cause bar hasn't been met, likely pulling the Supreme Court into the fracas. Given the way the act is written, it's unclear if even a largely Trump-appointed court would side with the president. The conservative majority might not want to upset years of precedent involving the Fed chair's independence, so better to let Powell serve out his term until it ends next May (he could stay on the Board of Governors until 2028). So far, it's the Bessent faction that is winning. Trump said Wednesday he has 'no plans' to fire Powell after reports surfaced that his days are numbered. But the president added a caveat: 'Unless he has to leave for fraud.' Coincidentally, it's Bessent who oversees vetting candidates for Powell's replacement as interest rate policy becomes a growing concern for the Treasury Secretary. Because the Big Beautiful Bill doesn't cut the deficit in the near term, Bessent must keep issuing lots of debt. He's borrowing a page from his predecessor, Janet Yellen, by rolling over short term debt so he doesn't cause a spike in interest rates on 10-year bonds, where consumer rates are priced (bond prices move in opposite direction from interest rates; you get higher rates when you issue more bonds). Considering all the above, maybe Bessent changes his tune and falls into the 'Fire Powell' camp for an interest-rate dove. It will make his debt-management job a hell of a lot easier. A White House spokesman and spokeswoman for Bessent had no immediate comment.
New York Post
01-07-2025
- Business
- New York Post
Powell's $2.5B Fed revamp denial exposes his privileged arrogance
Is Jerome Powell a liar or a fool? The august chairman of the Federal Reserve Board Chair told the Senate Banking Committee last week, 'There's no VIP dining room, there's no new marble. There are no special elevators' in the $2.5 billion renovation work at the central bank's Washington headquarters. 'There are no new water features, there's no beehives, and there's no roof terrace gardens.' In short, he categorically denied The Post's reporting on the swanky 'Palace of Versailles' redo — but without any explanation of why the project's planning documents include all those features. Those plans haven't been revised since 2021, when the work began, with an estimated cost of $1.9 billion. How did the price soar more than 30% if so many luxury items got dropped? All the guy who literally controls America's money supply could offer up was: 'The cost overruns are what they are.' OK; the Fed chief may not have perjured himself; he may well not know what's going on around him. We're pretty sure he knows how to read a spreadsheet — if he can be bothered to look. Keep up with today's most important news Stay up on the very latest with Evening Update. Thanks for signing up! Enter your email address Please provide a valid email address. By clicking above you agree to the Terms of Use and Privacy Policy. Never miss a story. Check out more newsletters Powell's disdain for questions about the taxpayers having to shell out at least $2.5 billion for work on a single, four-story office building exposes him as an arrogant, privileged, bureaucrat who seems to think 'civil servant' means he's the one who gets served. Let them eat cake! The pricey makeover comes when the Fed is hemorrhaging money — a stunning $233 billion in losses in three years. That's thanks to high interest rates and the overhang from more than a decade of utterly unprecedented 'quantitative easing' intervention in the private economy, which has left the Fed with a huge balance sheet of junk 'assets' Powell keeps saying he's going to unload soon. Incidentally, The Wall Street Journal reports that the beehives (Italian beehives!) got added to the building's roof back in 2023. Maybe the chief never gets up there? At a time when the Fed's exercising entirely new powers, its chief can ill-afford to raise the question: If he doesn't know what happening on his roof, is he really on top of what's going on under it?
