Policymakers have been cautiously monitoring the effects of Trump’s wide-ranging tariffs on the world’s biggest economy, as they mulled the right time to lower rates further.
This is because it takes time for levies to filter through to consumer prices.
The jury is still out on whether Trump’s latest tariffs will have a one-off or longer-term impact on inflation, but the president has regularly pointed to benign data to urge for rate reductions to boost the economy.
Shortly after government data was released on Tuesday, showing that consumer inflation stayed unchanged at 2.7 per cent in July, Trump wrote on social media that Powell “must now lower the rate”.
He also called the Fed’s leadership “complacent”.
Trump has openly floated the idea of ousting Powell over cost overruns for the renovation.
While the US leader says the price of the makeover was US$3.1 billion, reiterating this figure in his social media post on Tuesday, Powell has been quick to correct Trump in the past.
The cost has been put at US$2.5 billion, but Fed documents show it was originally estimated at US$1.9 billion and is now budgeted at US$2.4 billion, with the central bank citing higher labour and materials costs and unexpected challenges such as asbestos abatement.
On Tuesday, Trump said Powell was doing a “horrible” job in managing the Fed’s revamp. He visited the site earlier this month and repeated the accusations directly to Powell while also urging a rate cut.
A Supreme Court opinion issued this summer in an unrelated case about employees of other independent government agencies underscored that the law does not allow the president to remove a Fed chair over differences in monetary policy.
