On Thursday, President Donald Trump embarked on a notable tour of the Federal Reserve’s extensive office renovations, an event that initially seemed poised to become a public relations debacle for the central bank. Contrary to expectations, the meeting marked a potential pause in one of the most tumultuous periods for the Fed, which has been subjected to relentless criticism from Trump and his advisers.
Throughout his presidency, Trump has consistently targeted Fed Chair Jerome H. Powell, particularly for his reluctance to lower interest rates. Recently, Trump has also criticized the cost overruns associated with the $2.5 billion renovation project. However, during his visit, Trump adopted a more conciliatory tone. In a rare move for a sitting president, he personally visited the Fed, a practice not observed in nearly two decades.
Instead of the anticipated fireworks, the meeting unfolded in a surprisingly cordial atmosphere, albeit somewhat awkward, set against an active construction site filled with scaffolding, dumpsters, and plywood-covered walls. Wearing a white hard hat, Trump refrained from personal attacks against Powell, emphasizing to reporters that he did not wish to make the meeting personal. He even indicated that he would not fire the Fed chair and expressed support for the ongoing project.
Unlike the dramatic confrontations seen in the Oval Office during Trump’s interactions with foreign leaders, such as South African President Cyril Ramaphosa, this meeting was relatively uneventful. Trump left without securing any commitments from Powell regarding interest rate cuts, despite his efforts. In a moment that quickly circulated on social media, Powell publicly corrected Trump’s claims about the rising costs of the renovations, which added an unexpected twist to the visit.
Following the meeting, Trump’s rhetoric regarding Powell softened significantly. Previously labeling Powell as a “moron,” “numbskull,” and “a stiff,” Trump described him as a “very good man” when speaking to reporters before a trip to Scotland. “We had a very good meeting,” Trump stated, adding that Powell conveyed to him that the country is performing well.
Trump interpreted Powell’s comments as a potential indication that the Fed might soon consider lowering interest rates, a decision that would significantly impact the financial sector and affect what millions of consumers and businesses pay for mortgages, auto loans, and other types of financing. The meeting, which was organized on short notice after initial scheduling conflicts, caught the Fed off guard when Trump decided to participate directly.
While the Fed is not expected to lower rates during its upcoming meeting, Powell and other officials have suggested that further cuts could be on the horizon later this year, possibly starting in September. This prospect may be perceived by Trump as a conciliatory gesture. According to David Wessel, director of the Hutchins Center at the Brookings Institution, “The president is still going to be unhappy when the Fed doesn’t cut interest rates next week. But in the PR battle, the Fed has fought Trump at least to a draw and may actually have won this round.”
During the tour, there was a moment of tension when Powell fact-checked Trump’s claim that renovation costs had soared to $3.1 billion, a figure significantly higher than what the Fed had reported. Powell questioned the origin of Trump’s figure, which led to a discussion where both men reviewed documentation together. Powell pointed out that Trump had included costs from an unrelated building that reopened in 2021. Despite the brief confrontation, Trump managed to lighten the mood with humor, suggesting that lowering interest rates could be the solution to the ongoing criticism.
In the aftermath of Trump's visit, the Federal Reserve expressed appreciation for the president's encouragement to complete the renovation project and reaffirmed its commitment to being “careful stewards” of the resources involved. This unexpected meeting has opened the door for a potential thaw in relations between Trump and the Fed, signaling a new chapter in their ongoing dialogue.
