Trump to visit Federal Reserve on July 24, ramping up pressure on Powell

WASHINGTON - US President Donald Trump, a strong critic of Federal Reserve chair Jerome Powell, will visit the central bank on July 24, the White House said – a surprise move that escalates the tension between the central bank and the administration.

Mr Trump has lambasted Mr Powell repeatedly for not cutting US interest rates more aggressively,

referring to him as a “numbskull”

on July 22 and musing publicly about firing him.

The Republican President nominated Mr Powell to be Fed chair during his first term but has soured on his pick over disagreements about interest rates and the economy. Between Mr Trump’s stints in office, Democratic President Joe Biden nominated Mr Powell for a second term.

Adding fuel to Mr Trump’s ire, White House officials have accused the Fed of mismanaging the renovation of two historic buildings in the capital Washington, suggesting poor oversight and potential fraud.

White House deputy chief of staff James Blair said this week that administration officials would be visiting the Fed on July 24 but did not say the President would join.

The White House said on July 23 in a schedule it released to the media that Mr Trump would visit the Federal Reserve at 4pm local time on July 24.

The schedule did not say whether Mr Trump would meet Mr Powell.

A Federal Reserve official did not immediately respond to a request for comment.

Initial market reaction was subdued, with the yield on benchmark 10-year Treasury bonds steady at 4.387 per cent in Asian hours and the dollar weakening slightly.

Mr Trump’s public criticism of Mr Powell and flirtation with firing him have previously upset financial markets and threatened a key underpinning of the global financial system – that central banks are independent and free from political meddling.

Typically, US presidents refrain from commenting on Fed policy altogether in deference to the bank’s autonomy, but Mr Trump, whose governing style blasts through political norms, has not followed that example.

Since returning to office in January, he has attacked institutions – from law firms to universities to media organisations – in an effort to reshape US society in line with his vision.

He has used the same verbal sledgehammer against the Fed, pressuring Mr Powell to cut rates and blaming him for not stimulating the economy further.

Mr Trump has said he would like the Fed to cut its benchmark interest rate to as low as 1 per cent from the current 4.25 per cent to 4.5 per cent target range to reduce government borrowing costs. This would allow the administration to finance rising deficits expected from his spending and tax-cut Bill. But a Fed policy rate that low is typically a sign of a country in economic trouble. REUTERS