Powell: "Audit me if there's a problem" vs. Trump: "Moron"

Powell responds head-on to renovation cost allegations

Trump: "Interest rates should be lower than 1% per year"

Regarding the base rate cut, U.S. President Donald Trump has once again criticized Jerome Powell, the Chairman of the U.S. Federal Reserve (Fed). President Trump called Chairman Powell a 'moron' and insisted that the benchmark rate should be lower than 1% per year, while Powell directly confronted the 'excessive spending on Fed building renovation costs' raised by the Trump administration by voluntarily requesting an audit.

On the 14th (local time), at the White House Office of Faith-Based Initiatives luncheon, President Trump said, "We have a really bad Fed chairman. If he had lowered the rate, I would have been kind to him, but it doesn't matter," adding, "He is really like a moron and a stupid person," criticizing Powell.

President Trump's dissatisfaction has accumulated toward Chairman Powell, who has maintained a freeze on rates despite Trump's demands for a rate cut. Since President Trump took office, the Fed has held four Federal Open Market Committee (FOMC) meetings, but the benchmark rate has been frozen at 4.25~4.50% per year each time. As a result, President Trump has called Powell 'Mr. Too Late', as well as using epithets like idiot, fool, and loser.

On this day, President Trump again pointed out that the high benchmark rate has increased the federal government's interest burden on national debt, explaining that every 1% point in the base rate costs $360 billion, and every 2% points costs between $600~700 billion. He diagnosed, "The economy is booming and corporate confidence has surged," adding, "income has increased, prices have fallen, and inflation has disappeared." He stressed again that "the benchmark rate should be lower than 1% per year."

Meanwhile, Chairman Powell decided to face head-on the 'Fed building renovation cost controversy' raised by President Trump's camp. According to the American political media outlet Politico, Powell requested Federal Reserve Inspector General Michael Horowitz to conduct an audit regarding the renovation costs of the Fed building in Washington, D.C.

The Trump camp claimed that the renovation costs of the Fed headquarters increased by $700 million from the initial plan, reaching $2.5 billion, attributing this to design changes such as a rooftop garden, artificial waterfall, and marble decorations. Russell Vought, Director of the White House Office of Management and Budget (OMB), sent a letter to Chairman Powell on the 10th, criticizing the waste of taxpayer money on building interiors and sarcastically asking if he was "building the Palace of Versailles".

Some analysts interpret this as an attempt to find a pretext to replace Powell before his term ends in May next year, amid rumors of early replacement. Powell's implementation of interest rate policies contrary to presidential directives cannot legally constitute a legitimate reason for dismissal.

Axios analyzed, "On the surface, it may look like a rooftop garden issue, but in reality, it's a battle over control of the Fed", adding, "This is a move to build a case for lawfully dismissing Powell before the end of his term."

Reporter Han Kyungjae hankyung@hankyung.com