Trump Puts Pressure on Powell to Cut Rates in Historic Fed Visit

President Donald Trump toured the historic Eccles Building in Washington, D.C., on Thursday, ostensibly to examine the now-controversial $2.5 billion renovation of the Federal Reserve’s headquarters. It didn’t take long for Trump to acknowledge that his main goal is to put pressure on Federal Reserve Chairman Jerome Powell to lower interest rates.

Standing alongside Powell shortly after arriving for the visit, Trump criticized the cost of the renovation. Trump cited a higher renovation figure, prompting Powell to interject that the figure included work on a building completed years ago.

Asked by a reporter what Powell could say to get him to back off, Trump laughed and said, “Well I’d love him to lower interest rates. Other than that, what can I tell him.”

Presidents aren’t typically concerned with cost overruns that equate to about a week’s worth of Treasury auctions. And presidents don’t typically visit the central bank. This is the fourth visit by a sitting president since 1937. Needless to say, this visit was different.

Trump has been relentless in pressuring Powell to lower interest rates, which the president claims should be “three points, maybe more” south of their current range of 4.375%.

“I just want to see one thing happen, very simple, interest rates have to come down,” Trump said at the end of the visit. Asked repeatedly by reporters if he would try to fire Powell—which many legal experts say he lacks the power to do—Trump said he believed Powell will “do the right thing” and lower rates.

“To do that is a big move and I don’t think that it’s necessary,” Trump said of removing Powell.

Trump claims that inflation is lower, the economy is strong, and Powell is “too late” in cutting interest rates.

In addition to Trump, tour attendees included Powell, Sen. Tim Scott (R.-S.C.), Sen. Thom Tillis (R.-N.C.), Office of Management and Budget Director Russ Vought, and Federal Housing Finance Agency Director Bill Pulte, among others, Trump wrote on TruthSocial on Thursday.

Fed officials took reporters on a separate tour of the construction site earlier on Thursday, showing blast-resistant windows and other safety measures designed to isolate damage in the event of an explosion, according to a pool report written by reporters in attendance and distributed widely after the tour. Reporters also saw an elevator shaft that some Fed critics had said was meant only for VIPs but that Powell has said will be open to all Fed staff.

Fed staff told reporters a new building would have been less expensive than rehabilitating the Fed’s two historic buildings, given preservation requirements and needed upgrades.

The Federal Reserve building is seen as it goes under construction on July 17, 2025 in Washington, DC. Photo: Michael M. Santiago/Getty Images

Reporters visited the building’s rooftop, which had come under criticism for including “garden terraces” in the original plan. Fed staff said that seating for the roof, which will include grasses and other plants, had been removed from the plan and that it wouldn’t be open to general staff.

Reporters said an oval-shaped room for law enforcement outside the Governors’ wing was labeled “oval office” in marker on a wooden wall. When reporters swung by the area later, it had been painted over, and Fed staff said it was a joke.

Trump’s critiques add another challenge to Powell’s final months in office. The Fed chair wants to see where tariff rates ultimately land and how they will affect prices before committing to rate cuts. Powell is also seeing inflation gauges ticking higher and measures of financial conditions, which peg the ability of companies and investors to access capital, loosening notably. For those reasons, Powell is in no hurry to reduce borrowing costs.

Markets don’t see cuts ahead, either. The odds of a reduction at the Fed’s meeting next month next week are no better than 2.5%. The chances of a September move are only 60%.

Trump is losing patience. He wants lower borrowing costs, faster economic growth, and a Fed chair that won’t stand in his way. The president showed lawmakers the draft of a letter that would fire Powell; however, he later backtracked and said that he was “not planning” to fire him. Trump suggested he could dismiss Powell for fraud related to the renovation of the Fed building.

A recent Supreme Court decision has likely limited Trump’s ability to fire Powell before his term ends in May. The Fed has previously said that it disputes any wrongdoing related to the renovation, and that the administration lacks legal authority over its facilities. Powell has repeatedly said he won’t step down even if asked.

While investors have been rattled by the Trump-Powell drama, stocks have powered through a host of boundary-testing moves by the president over the past six months, ranging from tariffs and immigration to government spending authority, and military adventures.

Stocks are trading at record highs, bond markets are behaving, volatility gauges are muted, and the dollar is holding steady. Trade deals have been struck with the U.K. and Japan, while reports suggest a pact with the European Union is getting closer.

That may further embolden the president as he wages his campaign against Powell.

Write to Martin Baccardax at martin.baccardax@barrons.com and Joe Light at joe.light@barrons.com