President Donald Trump took aim at Federal Reserve Chair Jerome Powell during a tour of the Federal Reserve's ongoing renovation project, criticizing the project's escalating costs.

The president also linked potential changes in interest rates to his decision on whether to keep Powell in his role, with the latter's term set to end in May 2026, as Newsmax reports, though he suggested that immediate firing was not necessary.

The scheduled visit to the Federal Reserve headquarters was meant for an inspection of the significant renovation efforts. Trump seized the opportunity to vocalize his dissatisfaction with Powell's handling of the costs associated with the project.

The original estimate was $2.5 billion, but the project has now reached $3.1 billion.

Controversy arises over project costs

Despite the disparity in figures, President Trump suggested that someone be held accountable for the cost overages, recommending the removal of the project manager overseeing the renovations.

The Federal Reserve's staff responded that the increased budget allocations were due to new security directives, fluctuating material costs, and tariffs.

Much of the construction price hikes can be attributed to tariffs on materials, with steel, in particular, surging approximately 60% since the original renovation plans were approved. Interestingly, these tariffs were imposed under Trump's administration.

One noteworthy comment from Powell during the tour included his incredulous question, "This came from us?" This remark appeared to express his surprise at the extent of the cost changes, pointing to additional elements in the renovation plan.

Tensions with Powell persist

The financial discord between Trump and Powell isn't solely about construction costs. The two have clashed in the past over monetary policies, especially regarding the adjustment of interest rates. Trump has long called for cuts, believing they would bolster economic growth.

Yet another wrinkle in this scenario is the ongoing debate over the independence of the Federal Reserve. Trump's criticisms and suggested influence over interest rates challenge this independence.

While Trump has hinted at replacements for Powell, the Supreme Court has voiced that a Fed chair removal requires sufficient cause. This complicates any straightforward attempts at a change in leadership.

Insights from Bessent emerge

Amidst these tensions, Treasury Secretary Scott Bessent has come to Powell's defense, asserting that he sees no reason for Powell to resign. Bessent described Powell as a "good public servant" and emphasized the importance of stability in public service roles.

Looking back, the Federal Reserve's renovation project initially had a $1.9 billion estimate starting in 2022. Several factors, including preserving the historic integrity of the building and meeting contemporary security needs, gradually increased the budget.

To curb costs, modifications to the original renovation plan include eliminating previously planned features like a rooftop seating area and ornamental water features. These adjustments were reviewed and approved by local oversight bodies.

Trump's perspective

During the tour, President Trump expressed his frustration, remarking, "This stubborn guy at the Fed just doesn’t get it -- Never did, and never will."

His comments hinted at a deeper frustration, not just over financial mismanagement but also a difference in economic vision. Reflecting on the project's start and progress, Trump acknowledged the lengthy journey ahead, noting, "It’s too bad it’s started.

But it did start, and it's been under construction for a long time." He expressed a desire for the project to reach completion. Finally, with an air of reluctant optimism, Trump maintained, "To do that is a big move and I just don't think it's necessary. I believe he’s going to do the right thing. ... It may be a little too late, as the expression goes."

The saga of the Federal Reserve headquarters' renovation continues to unfold, intersecting with the broader conversation on fiscal policies and leadership within the nation's banking system.