Trump Escalates Attacks on Fed Chair Powell, Citing Interest Rates, Renovation Costs

President Donald Trump has once again publicly decried Federal Reserve Chair Jerome Powell, reviving concerns over the independence of the central bank just weeks ahead of expected shifts in U.S. economic policy.

Speaking to a group of religious leaders at the White House on Monday, Trump accused Powell of not responding to what he described as manageable inflation levels, and once again urged the Fed to decrease interest rates to just 1 percent.

“He’s a knucklehead. Stupid guy. He really is,” Trump said.

Trump’s previous threats to replace Powell have shaken financial markets, with investors worrying about growing pressure on the central bank from the White House.

Powell has repeatedly stressed that it is still too early to cut rates, citing volatile trade policy as a risk for the global economy and a reason to keep the current interest rates.

Over the weekend, Trump also said he planned to introduce a 30 percent tariff on imports from the EU and Mexico effective August 1 unless the potentially affected countries reach trade agreements with Washington.

In addition, Trump’s economic adviser Kevin Hassett hinted that Powell could be dismissed “for cause,” citing a major rise in renovation costs for the Fed’s buildings in Washington, D.C. Initially funded at under $2 billion, the budget now amounts to roughly $2.5 billion, which is some $700 million more than originally planned.

Russell Vought, Trump’s top budget adviser and a key figure behind the administration’s Project 2025 plan for federal restructuring, said last week that the White House was “extremely troubled” by the costs. The U.S. Inspector General confirmed that Powell has asked a formal review of the renovation project’s financial overruns.

With input from Al Jazeera