Happy Thursday! President Donald Trump visited Federal Reserve headquarters today and toured the bank's renovation project alongside Fed Chair Jerome Powell. This was no friendly social call, though. It was part of Trump's long pressure campaign against the Fed chairman - and, perhaps, an attempt to shift the national conversation away from the Jeffrey Epstein scandal. A quick scan of other news media suggests that didn't work.
Here's your evening update.
Trump Clashes With Powell Over Fed Renovation Costs
President Trump ramped up the pressure Thursday on Federal Reserve Chair Jerome Powell to lower interest rates during a joint inspection of the central bank's renovation project for its headquarters building in Washington, D.C.
Although the Fed is self-funded and does not rely on appropriations from Congress, Trump has complained about the rising cost of the renovation project and hinted that it could be grounds for dismissal of the Fed chief, whose current term runs through May 2026 and who can be removed only for cause before that date. Trump has raged about Powell's refusal to lower interest rates, as Trump wants, and some see his sudden interest in the Fed's years-long renovation project as a ploy to fire Powell and replace him with a more deferential leader.
As they walked down a hallway clearly under construction, Trump claimed that the cost of the renovation has now risen to $3.1 billion - a claim Powell disputed. An early cost estimate in 2021 was about $1.9 billion for the renovation, a figure that has now risen to roughly $2.5 billion. The Fed says the increase has been driven by unforeseen problems with asbestos removal from the nearly 90-year-old building and the construction of a multi-story underground garage, as well as the general rise in construction costs during the pandemic, and not by extravagance or incompetence, as Trump and some White House officials have charged.
Powell shook his head as Trump repeated the claim, even as Trump handed over a document that supposedly proved that the project now cost $3.1 billion. Powell quickly reviewed the paper and said that Trump's higher figure included the cost of a building that had been completed five years ago.
Still, Trump continued to project the weary irritation of a boss whose underling can't get a problem solved. Asked by a reporter what he would do as a real estate developer to a manager who went over budget, Trump said with relish, "I'd fire 'em."
Trump then shifted to what appears to be his primary interest. Asked what Powell could do to end the barrage of criticism the president has offered recently - criticism that includes calling the Fed chair a "numbskull," a "complete moron" and a "major loser" - Trump said simply, "I'd love him to lower interest rates."
Powell just chuckled.
Trump Signs Bill Clawing Back $9 Billion in Spending
President Trump today signed the bill that Congress passed last week rescinding $9 billion in previously approved funding for foreign aid and public broadcasting. The legislation codifies some cuts targeted by the Trump administration's Department of Government Efficiency. The cuts include about $1.1 billion over two years that was to go to the Corporation for Public Broadcasting, which supports NPR and PBS stations nationwide.
The White House and congressional Republicans have said additional requests to claw back funding will be coming. A second rescissions package is reportedly set to target the Department of Education. The administration continues to withhold billions of dollars in funding for schools, though it did say it was releasing about $1.3 billion in money for summer and afterschool programs.
Politico reports that House Speaker Mike Johnson recently told Republicans that the next package of proposed cuts will be smaller than the first. While fiscal hawks in the party are eager to see more cuts, some GOP lawmakers have expressed concerns about the rescissions, urging the White House to provide more specifics about which programs will be targeted. Some in the party have also acknowledged that the rescission requests complicate the annual process of funding the government by eroding whatever trust might still remain between Democratic and Republican appropriators.
White House budget director Russell Vought is also looking at so-called pocket rescissions - a strategy in which the White House would send a request to cancel funding shortly before the end of the fiscal year on September 30, leaving lawmakers less than the usual 45 days to consider the cuts. If Congress doesn't act on the request, the funding would be canceled on October 1.
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Fiscal News Roundup
- Trump Pushes Powell on Interest Rates as They Tour Fed Building – Bloomberg
- Powell Fact-Checks Trump on Cost of Fed Renovations – New York Times
- Fed Gives Reporters a Rare Look at Its $2.5B Renovation Project as Tensions Flare – Associated Press
- Thune's Plans for the Fall Shutdown Fight – Politico
- House Panel Approves Spending Bill That Rejects Some Trump Foreign Aid Cuts – New York Times
- Trump Says Countries Will Face Tariffs Ranging From 15% to 50% – Bloomberg
- U.S. and EU Scramble to Strike a Trade Deal Ahead of Aug. 1 Deadline – CBS News
- Trump's 'Massive' Deal With Japan Is Giving US Automakers Heartburn – Politico
- Trade Deal Could Give Japanese Cars a Leg Up in U.S. Market – New York Times
- USDA Will Relocate Most of Its D.C.-Based Workforce – Washington Post
- ICE Moves to Shackle Some 180,000 Immigrants With GPS Ankle Monitors – Washington Post
- UnitedHealth Says It Is Cooperating With DOJ Investigation Into Medicare Billing Practices – CNBC
- Roche Boss Says 'Very Easy' to Cut US Drug Prices by 50% – Financial Times
- Trump Loses Favor With Independents; Overall Approval Hits 37 Percent: Gallup – The Hill
- Venmo a Gift to Help Pay Uncle Sam's Debt? You Can, if You Really Want – Axios
Views and Analysis
- If Trump Keeps Intimidating the Fed, He Will Pay a Price – New York Times Editorial Board
- What the Federal Reserve Can Do to Help Itself – Charles I. Plosser and Mickey D. Levy, Wall Street Journal
- The Fed Needs to Tread Carefully With This Strange Dollar – Jonathan Levin, Bloomberg
- The Price of Winning the Trade War – Wall Street Journal Editorial Board
- How Trump Has Shifted Trade War Psychology – Courtenay Brown and Neil Irwin, Axios
- Trump's Tariffs Are the Highest in a Century. But After His Threats, They Seem Like a Relief – Ana Swanson, New York Times
- Republicans Are Adding Health Care Taxes - but Not on the Rich – Gene Sperling, Washington Post
- Republicans Missed a Shot at Serious Medicaid Reform – Bloomberg Editorial Board
- Will Democrats Cave Again on the Next Government Shutdown? – Ed Kilgore, New York
- Why Cutting Capital Gains Tax on Home Sales Wouldn't Solve the Country's Housing Issues – Diana Olick, CNBC
- What Trump Should Tackle Next to Boost Growth – Glenn Hubbard, Financial Times
- Trump Wants You to Have Your Choice of Cokes - and Not Much Else – Matt Bai, Washington Post
- Will Trump Accounts Actually Help Families Save? – Alex Muresianu, Kyle Hulehan, Dan Carvajal, Tax Foundation
- FAQ: The One Big Beautiful Bill Act Tax Changes – Garrett Watson, Tax Foundation