In the bowels of the US Federal Reserve this summer, two of the world’s most powerful men, sporting glistening white hard hats, stood before reporters looking like students forced to work together on a group project.
Allies of Donald Trump had spent weeks trying to manufacture a scandal around ongoing renovations of the central bank’s Washington headquarters and its costs. Now here was the US president, on a rare visit, examining the project for himself.
“It looks like it’s about $3.1bn. It went up a little bit – or a lot,” Trump said, as Jerome Powell, the typically calm Fed chair, vigorously shook his head. “So the $2.7bn is now $3.1bn–”
“I’m not aware of that, Mr President,” Powell quickly interjected, as Trump pulled out a paper from his suit pocket as evidence. “I haven’t heard that from anybody at the Fed.”
The remarkable public encounter in late July was described as a “tussle”, “spar” and “feud” by news outlets and came to symbolize an extraordinary battle for control of the world’s largest economy.
Never before has a president been so publicly, and relentlessly, critical of the country’s top monetary policymaker. For decades, successive administrations have allowed the Fed, as the institution tasked with steering the US economy, to function independently, without political interference. No longer.
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