Trump to visit Federal Reserve on Thursday, ramping up pressure on Powell

US PRESIDENT Donald Trump, a robust critic of Federal Reserve Chair Jerome Powell, will visit the central bank on Thursday, the White House said, a surprise move that escalates tension between the central bank and the administration.

Trump has lambasted Powell repeatedly for not cutting US interest rates more aggressively, calling him a “numbskull” on Tuesday and musing publicly about firing him.

The Republican president nominated Powell to be Fed chair during his first term but has soured on his pick over disagreements about interest rates and the economy.

Between Trump’s stints in office, Democratic President Joe Biden nominated Powell for a second term.

Adding fuel to Trump’s ire, White House officials have accused the Fed of mismanaging the renovation of two historic buildings in Washington, D.C., 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 Thursday but did not say the president would join.

In a schedule released to the media on Wednesday night, the White House said Trump would visit the Federal Reserve at 4 pm (2000 GMT) on Thursday. It did not say whether Trump would be meeting with 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.

Trump’s public criticism of 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 Trump, whose governing style blasts through political norms, has not followed that example.

Since returning to office in January, Trump 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 Powell to cut rates and blaming him for not stimulating the economy further.

Trump has said he would like the Fed to cut its benchmark interest rate as low as 1 per cent from the current 4.25 to 4.50 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