The Trump administration’s criticism of Federal Reserve Chair Jerome Powell took an escalated and sharp turn on Thursday. Just two weeks after Trump had urged Powell to cut interest rates in a handwritten note, his budget chief, Russell Vought, has now publicly accused the Fed Chair of breaking the law.
Vought has claimed that Powell failed to follow government oversight rules and misled Congress about the details of a $2.5 billion renovation project at the Fed’s Washington DC headquarters.
In a letter shared on social media, Vought said that Trump was deeply concerned about how Powell was managing the central bank. Instead of taking steps to address the Fed’s financial issues, Vought argued that Powell had moved forward with an expensive and unnecessary renovation of the Fed’s main office.
“The President is extremely troubled by your management of the Federal Reserve System. Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington D.C. headquarters,” Vought said in the letter, addressing Powell.
Mike Pence backs Trump’s open criticism of Powell
Former Vice President Mike Pence, in an interview with Bloomberg Television on Thursday, defended Trump’s public criticism of Powell and his push for lower interest rates. Pence said that it was entirely within a President’s rights to comment on both the Fed chair and the central bank’s actions. He also expressed his own doubts about how independent the Fed should be, suggesting it shouldn’t be treated as an untouchable institution.
“I don’t really accept that the Federal Reserve should be a completely separate agency, you know, like a College of Cardinals that we never refer to other than in respectful hush tones,” Pence said. “The president ought to be able to express himself,” he added.
Trump vs Powell
Trump has been consistently attacking Powell, pressuring him to cut interest rates. Earlier in the week, he intensified his criticism, mocking Powell for raising concerns about inflation, which Trump believes no longer exists. He has also used insulting language like “stupid” to describe the Fed Chair, accusing him of being slow to act on rates.
Powell, on the other hand, has indicated that the Fed might already have started reducing interest rates if not for the uncertainty caused by Trump’s broad tariff policies, which have complicated the outlook on inflation.