fed federal reserve powell trump.

President Donald Trump has opened up a new front in his attack on the Federal Reserve and its chair, Jerome Powell: He says the alledged mismanagement of a building renovation project could be grounds for firing Powell. Such an unprecedented step could send the financial markets into a tailspin and over time push up interest rates and weaken the U.S. economy. If investors start to worry the Fed is no longer independent, fewer may buy U.S. bonds, which would push up the interest rate on those bonds and lift borrowing costs more broadly.

Federal Reserve Chair Jerome Powell on Thursday said the agency’s renovation of its office complex in Washington complies with plans approved by a local commission, disputing a White House suggestion that they had violated the law by deviating from those plans. The letter is the latest salvo in an escalating battle between the Trump administration and the Federal Reserve, an independent agency charged with fighting inflation and seeking maximum employment. President Donald Trump has for months attacked Powell and the Fed for not lowering its key interest rate, which the president says would boost borrowing and accelerate the economy.