US President Donald Trump has escalated his long-simmering battle with Federal Reserve Chairman Jerome Powell. The White House is now requesting an audit of the Federal Reserve building, as President Trump complains about a planned $2.5 billion renovation. Trump blames the central bank for mismanaging funds and has publicly thought about dismissing Powell, though legal and institutional barriers prevent that.
However, Powell has stood firm against pressure to lower interest rates. He warns that Trump’s tariffs have already increased costs, and early rate cuts might further fuel inflation. Wall Street executives and lawyers are fighting back, advocating for the independence of the Fed and against political interference.
White House Targets Fed Building Over Renovation Costs
On Thursday, White House budget chief Russell Vought said the administration would like to audit the Fed’s facilities. The renovation of the headquarters, originally planned to cost $1.9 billion in 2019, has now swollen to $2.5 billion. Trump, citing this hike, asserted, “There may be fraud involved.”
Vought stated that the president had “substantial concerns” regarding Powell’s management. He added that although removing Powell is “unlikely,” the president is questioning the way the Fed used its funds.
The Federal Reserve has answered back against the price increase. The institution says the renovations are for two historic buildings that have not been fully upgraded since the 1930s.
Trump Threatens Powell, But Legal Roadblocks Remain
Trump has long insisted that Powell step down. Since returning to the White House, he has been repeatedly calling for rate reductions. But Powell has pushed back, warning that cutting rates now would make inflation hurt even more because of Trump’s own tariffs.
On Friday, Trump mentioned firing Powell at a private dinner party with Republican senators. “I don’t rule anything out, but I think it is highly unlikely unless he has to quit for fraud,” he stated.
But the Supreme Court has asserted that the Federal Reserve is unlike most federal agencies. In an earlier decision this year, the court said, “The Federal Reserve is a uniquely structured, quasi-private entity.” Ousting its chairman would probably ignite a lengthy court fight.
Wall Street and Legal Experts Push Back
Finance leaders have also sounded an alarm. JPMorgan Chase CEO Jamie Dimon cautioned on Tuesday that fiddling with the Fed’s autonomy would be a bad precedent.
“The autonomy of the Fed is absolutely imperative,” Dimon said. “Not only for the present Fed chairman, whom I respect, but for the future Fed chairman.”
Even after Trump’s last-minute criticism, Powell remains in office, serving his term ending in May 2026. Ironically, Trump himself had nominated Powell in 2018, even though President Joe Biden later renewed his term in 2022.
Trump’s pressure campaign is probing the limits of presidential authority over independent institutions. But legal firewalls and institutional norms remain intact, for the time being.
