Speaking at the White House on 13/1, President Donald Trump addressed reporters' questions about whether the criminal investigation into Federal Reserve (Fed) Chair Jerome Powell would undermine confidence in the agency's independence. Trump stated: "Powell let billions of USD go over budget. So, he is incompetent, or he is not telling the truth. I don't know how Powell feels, but he certainly hasn't done his job well".
Later that day, visiting a Ford automobile plant in Michigan and speaking at the Detroit Economic Club, Trump continued to criticize Powell. "He'll be gone soon", he said. Powell's term as Fed Chair concludes in May.
The President appeared to refer to the cost of the Fed headquarters renovation project in Washington, the focus of the investigation. Powell stated on 11/1 that the Fed had received a grand jury subpoena regarding the project.
In 2019, the Fed estimated the headquarters renovation cost at 1,9 billion USD, later adjusting it to 2,5 billion USD. The agency attributed the more than 33% increase to design changes, material and labor costs, and "unforeseen factors".
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President Donald Trump and Jerome Powell at the White House in 11/2017. Photo: Reuters |
Trump's statements came as the criminal investigation into Powell faced criticism. "Everyone we know believes in the independence of the Fed. Anything that erodes it is probably not a good idea", said JPMorgan Chase CEO Jamie Dimon on 13/1. He warned the investigation could have the opposite effect, "driving up inflation expectations and causing interest rates to rise over time".
Trump dismissed Dimon's concerns, telling reporters: "I think what I'm doing is fine", and adding that "interest rates should have been lower".
CNBC, citing close sources, reported that US Treasury Secretary Scott Bessent also expressed concern to Trump that the investigation could complicate plans for the next Fed chair candidate. He reportedly warned that this decision could affect financial markets.
Powell suggested the renovation project was merely a "pretext" for the investigation, as he had not aggressively cut interest rates as Trump desired. However, the President later asserted that this was unrelated to his views on interest rates.
"No. I don't even think that way. The thing that is putting pressure on him is that interest rates are too high. That's his only pressure", Trump told NBC on 11/1.
By Ha Thu (CNBC, Reuters)
