Continue to attack Powell! Trump criticizes him as "stupid" and calls for interest rates to be lowered to 1%

According to the Zhitong Finance APP, U.S. President Donald Trump has once again targeted Federal Reserve Chairman Jerome Powell, not only fiercely criticizing his high interest rate policy but also calling him a "fool," urging the Federal Reserve to lower the federal benchmark interest rate to 1%. This statement has sparked widespread controversy in the market and among economists, given that inflation remains above target and the economy is operating robustly. Trump began his relentless criticism of Powell during his first term (2018), and recent attacks have become particularly frequent and intense. Since June 2025, Trump has publicly criticized the Federal Reserve and Powell almost every one to two weeks on different occasions. On Monday, Trump stated, "We have a very bad Federal Reserve chairman, very bad. I have tried to be nice to him, but it hasn't worked." He added, "For every percentage point increase in interest rates, we have to pay an additional $360 billion. Now that rates are around 4.5%, why are we still paying such high costs?" Trump emphasized that the U.S. should lower interest rates to 1% to reduce borrowing costs, saying, "We should only be paying 1% interest, not 4.5%." However, analysts point out that the 1% interest rate level advocated by Trump is typically a drastic measure used in response to economic crises. Over the past 25 years, the Federal Reserve has only lowered rates to such low levels in extreme situations like financial crises or the impact of the COVID-19 pandemic. Currently, the U.S. economy does not meet these conditions. Employment is close to full, inflation remains above the Federal Reserve's 2% target, and economic growth remains stable. In this environment, a hasty rate cut would not only be detrimental to price stability but could also be interpreted by the market as the Federal Reserve yielding to political pressure, undermining its independence and credibility. Especially considering that the U.S. Treasury market is as large as $36 trillion, a loss of investor confidence in the Federal Reserve could trigger market turmoil. In addition to the monetary policy controversy, the White House and the Federal Reserve have recently engaged in a heated conflict over a $2.5 billion office building renovation project. According to media reports, the Federal Reserve is planning a comprehensive renovation of its headquarters, the Eccles Building, located in Washington, D.C., and another office building. The initial budget was set at $2.5 billion, but disputes arose due to cost overruns. The Trump administration has strongly questioned the project, calling it a "textbook example of fiscal mismanagement." National Economic Council Director Kevin Hassett stated in an interview, "The Federal Reserve can print money and spend $2.5 billion to build a building without congressional oversight, a situation that was never envisioned when the Federal Reserve Act was drafted." In response to the controversy, Federal Reserve Chairman Powell has requested the Federal Reserve System's Inspector General to review the renovation project. According to detailed Q&A documents released on the Federal Reserve's official website, the renovation primarily includes the removal of harmful substances such as asbestos and lead, upgrading building safety standards, and meeting modern office needs. The documents indicate that these buildings have never undergone systematic renovations since their construction, "although some maintenance work has been done in the past, there has been no comprehensive modernization upgrade." The Federal Reserve emphasizes that it does not rely on taxpayer funds for its operations, and the project is not subject to oversight by the White House's Office of Management and Budget. Former Federal Reserve Governor Kevin Warsh stated in an interview with Fox News that the renovation expenditure is "shocking" and accused the central bank of "straying from its core mission." Notably, Warsh is considered a strong contender for the next Federal Reserve chairman after Powell's term ends The Director of the Office of Management and Budget at the White House, Shalanda Young, also posted on social media, stating that the project is like the "Palace of Versailles" and is a symbol of "fiscal management disaster."