Instant Reaction: Trump, Powell Discuss Rates, Clash on Cost of Fed Renovations

0:00Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.

0:42When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once. from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation.

1:17Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi. Background play, so you can lock your phone, and it still plays, baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies. Terms apply. Cancel any time.

1:54Bloomberg Audio Studios. Podcasts. Radio. News. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3 ,000 journalists and analysts around the world. It looks like it's about 3.1 billion. It went up a little bit or a lot. So the 2.7 is now 3.1. I'm not aware of that. Yeah, it just came out. Yeah, I haven't heard that from anybody at the Fed. Yeah, it just came out.

2:32Our notes had about 3.1 as well. 3.1. 3.2. This came from us? Yes. I don't know who does that. You're including the Martin renovation. You just added in the 3.1. You just added in a third building is what that is. That's a third building. It's a building that's being built. It was built five years ago. We finished Martin five years ago. It's part of the overall work. We are, of course, just seeing a live shot and hearing from President Trump and Fed Chair Jay Powell at the construction site at the Federal Reserve in Washington, D.C. the president making some brief comments about the work and construction that's being done at the Federal Reserve.

3:18He's been somewhat critical about the costs and what he sees as cost overruns and a little bit of a back and forth between the Fed chair and the president when it comes to the cost. The Fed chair is saying specifically that was an inclusion of a third building where work had already been done on. So kind of interesting to see the back and forth. We did also see the president being asked about taking back maybe some of the criticism of Fed Chair Jay Powell. He didn't really want to go into it, but he did also once again say something he has said many times, and that is he would like to see the Fed cut interest rates.

3:51Yeah, specifically, I want to go back to this idea of the different numbers that have been discussed. $3.1 billion is what the president just said is the cost of this construction project. He said this in a Truth Social post to just about at about 341 Wall Street time earlier. That number coming as a surprise to the chairman of the Federal Reserve, as you just mentioned, Carol, he took out the president, took a piece of paper out of his pocket, handed it to the Fed chair who shook his head repeatedly and said, no, no, this includes another building. We finished that building five years ago. Yeah, exactly.

4:24Some real time disagreement about the figures that have been discussed here. Exactly. We should also point out, because trade is certainly front and center here, investors care. President Trump was asked about some trade agreements, and he said that they're doing well with the European Union. And then again, repeated that he wants to see U.S. interest rates come down there, that as the Fed chair was standing beside him. Let's get to Wendy Benjaminson. I do feel like sometimes there are moments in our history that will stay with us. That picture iconic of the two of them standing there with hard hats on.

4:59Totally, totally. Wendy, of course, senior editor at Bloomberg News. She's out there in our Washington, D.C. bureau. I have to say, Wendy, Tim and I were looking at ourselves, our kind of mouths open. Walk us through what we just saw. Well, first, just the fact that that the president toured a construction site of what is, you know, a fairly routine renovation of a building built in the 1930s that he would that he would tour. it was extraordinary in itself. The fact that he and Powell were standing shoulder to shoulder when clearly they are at odds right now about just about everything that Powell is doing.

5:36And then that extraordinary moment you were just talking about where Trump is speaking, the president is speaking and saying what he believed the cost of the renovation to be, or at least what he said the cost of the renovation to be. And Powell just starts shaking his head like crazy saying, no, that's not right, which is unusual, but he's perfectly within his rights to do that, and pointed out that the extra billion or so that Trump mentioned was for a building that was completed several years ago. And Trump said, well, it's part of the overall project, but it was completed. It was done. I mean, this is the buildings that have irked President Trump and Senator Scott, who was there with them, you know, are I think it's around two billion, two and a half billion.

6:22One one person who is set to be there today, the president sending in a missing in a post on True Social is Bill Pulte, who is his appointees to the National Capital Planning Commission, but also oversees Fannie and Freddie. And I'm just wondering how you view his role in all of this because he's been so outspoken with his criticism of Fed Chair Jay Powell. And it seems like he's also served as a sort of person who's tried to communicate those frustrations to a wider audience, including lawmakers in Washington, D.C. What is his role here? Well, you've described it very aptly. His role as one of Trump's team, a lot of, you know, a lot of these loyal Trump appointees will seize an opportunity to take on the role as sort of the Greek chorus for Trump.

7:15You know, he can post on Truth Social and he says things, but then you have this sort of chorus behind him of guys like Bill Pulte or Senator Scott or, you know, whoever else it is at the moment. Sometimes it's Treasury Secretary Scott Besson, sometimes it's Commerce Secretary Howard Ludnick. And they just sort of step a little bit outside their roles to act simply as an ally of the president and able to take a case on that he wants to take on. This is a little unusual because, as you noted, this Bill Pulte runs Fannie and Freddie, which don't, you know, don't have a direct connection to cost overruns of a renovation of a federal office building.

7:54So, you know, it's it's it is an unusual role, but it's typical in this administration. Is it telling? I mean, the body language of Fed Chair Jay Powell, I don't want to get all, you know, psychologist on you, but, you know, it was pretty clear that it was a little uncomfortable and he seemed like he had a stern look on his face. But having said that, you know, Jay Powell has gotten a lot of criticism from President Trump. And I'm just wondering, is it kind of telling in an environment that it's very rare that anyone seems to maybe push back at President Trump to see that actually play out in real time.

8:33Yeah, well, if you think absolutely, I mean, if you think about them as just like normal people, let's think this is like a normal job. So your boss has been after you and after you and after you for months telling you you're doing a terrible job. And then the two of you have to go to some public event together and, you know, pretend that you work well together like each other. And clearly these two don't. And yet Powell had to do the common courtesy of taking the president around the building that he, you know, that he's the chairman of the board of. And so it was already very awkward. And then when Powell started shaking his head and contradicting the president in public, I think I think we're going to get some true social posts this afternoon.

9:16What do you mean, though? Like like true social posts in what direction? Like, what is he what is the president hoping to accomplish with this? Because it does look like it's look media has been. This is a visit that he gave a heads up on to his followers on social media about this. Media was there. He took questions. Obviously, they follow the president wherever he goes, where there is open press. But I mean, this is this is something he wants the world to see. absolutely and the fed pr office was also i think very smart this morning and offering the media a tour before the tour so a lot of reporters got to go in there with cameras with notebooks with everything to see the renovation and a lot of media outlets had stories on their sites ahead of the tour saying here's what it looks like and so that if with the aim that i suppose if trump were to contradict it and say, you know, it looks terrible, it's going awfully, then, you know, the stories were already out there with the condition of the construction site.

10:20I'm no expert on construction. It looked like a construction site to me. But, you know, but when I'm talking about True Social post later, I'm thinking that Trump was probably, and I have no idea. Let me just say that. But I'm guessing he might be a little annoyed by Powell's behavior. And this will cause him to post on True Social just some extra criticisms of Jerome Powell, who probably figures, one, he can't legally fire him. And two, he already knows he's in the doghouse with Trump. So what has he got to lose? And he can't at least legally be fired. Hey, listen, before we go, obviously, there was all of that.

10:58But he did mention about talking with the Fed chair on a Japan trade deal. We also said that we heard from the president that he's doing well with the EU. Anything else of note from those brief comments from the president that you think our audience should be aware of? No, no, you're right. He did mention those. The only other thing I would note is that he once again sort of slapping Powell on the back said, I would like him to lower interest rates. So that was, you know, yet another opportunity for him to remind Powell of what I doubt Powell has forgotten, which is that the president would like interest rates lowered.

11:34But the FOMC, the Federal Reserve, is meeting later this month and they'll decide what to do. And they they tend to decide that independently of the president. That's right. The next next Fed decision. Yeah. Next week, July 30th. So it's Wednesday that we're going to hear from the Fed chair. And I'm guessing the reporters who are in the room are sharpening their pencils right now asking questions, getting questions ready about this visit. And I know what they probably are, what he's going to say, too, which is he's going to stick to the dual mandate. Maybe Jay Powell with that hard hat on just to make sure he's protected.

12:06Hey, Wendy, you are amazing. Wendy Benjaminson, she's senior editor at Bloomberg News. She's out there in our Washington, D.C. bureau. I want to go now to just some updates that we heard from the president. Another redhead crossing the terminal. All these headlines coming together now. The president says firing Jay Powell is unnecessary. The president saying the Fed we'll do the right thing. The president was asked specifically about other names that he has in mind for the next Fed chair. He says, I have a name in mind, maybe three names in mind. He did joke with Senator Tim Scott that he would be a good pick, but he's not going to leave the Senate.

12:38The president said, and reiterated, there's no pressure for Powell to resign. All right, let's head back to the nation's capital and to Bloomberg News Federal Reserve reporter Jonel Marte joining us. Interesting to watch the last hour, the tour between the president and the Fed chair, Jay Powell, obviously some back and forth in terms of the cost of the construction being done at the U.S. Central Bank. Jump in. Tell us what you take away from watching the interaction and some of the commentary that we got from President Trump that followed. So it appears that the president, you know, he did have an opportunity here to really hammer the Fed perhaps even more so on what's going on with their renovation.

13:24And, you know, he's been very critical of them on social media, as you've noted. And he didn't necessarily do that. He kind of made some comments about how I sort of understand what happened and, you know, these things get more expensive over time. And he, of course, he did say, I would have done things a little bit differently, offered his input on, you know, maybe he would have avoided some of these costs. But But the bottom line seems to be that he was not he did not escalate the confrontation. If anything, it felt like a little bit of a de-escalation here. And it was really another opportunity for him to bring back the message that he has been sending, which is that he wants to see lower interest rates.

14:07He would love to see lower interest rates. And, you know, it is a reminder that this is a White House that is trying to exert more influence over these kinds of decisions that are typically viewed as independent central bank decisions. What do you make of any central bank head or the head of the U.S. Federal Reserve? And I just think about every press conference that we see Jay Powell or any forum that he's in, you know, certainly very careful and thoughtful about what he says because he knows what he says can certainly impact financial markets. And I'm just curious about the back and forth of the Fed share, certainly caught off guard, safe to say, right with that new estimate on the costs, and then kind of correcting the president or saying, well, wait a minute, let me tell you what that's about.

14:56It was a little tense. So what do you, I don't know, what's the thought in terms of the Fed share kind of pushing back there? Yeah, of course, it was a unique image to see them side by side. usually they're not interacting too much in person and has, as we've noted before, it's really uncommon for the president to even go to the FAD, right? Before this, we hadn't seen it since 2006. So definitely a big image to see them together. And I guess not all too surprising to hear Powell push back. I mean, he's very much focused on numbers and the data. And if he hears a number that he's not familiar with, he wanted to see, you know, they handed him the paper and then he clarified, okay, that includes another renovation that's already done that was done several years earlier.

15:43So, I mean, I think that's what we have seen from Powell. You know, he's really likely to say and his message has been that he's focused on doing his job, focused on the economy. But of course, if he hears a number that doesn't sound right to him, he will speak up. I can only think about what happens next week. Of course, we've been in this quiet period, so we haven't heard from a lot of Fed officials ahead of the meeting that starts on On Tuesday, we hear from Fed Chair Jay Powell on Wednesday. That's the 30th. And I'm wondering if you're going to get any answers or we're going to get any answers in Washington from the Fed Chair.

16:21Because I know that reporters who cover the Fed are getting their questions ready to ask him about this tour and ask him about the latest criticism. So next week, for sure, we are anticipating that he will be asked about the tour and the renovations themselves. themselves what you know they've they've gone out of their way to show the press around to provide more information online about this renovation because it has become a big line of attack for republicans that want to um maybe push powell out or put more pressure on the fed um so it's going to come up next week and we still are largely not expecting for the fed to lower rates at this meeting according to what investors are counting on, despite we are seeing at least two Fed officials, two Fed governors that were appointed by Trump saying that they would support a rate cut at this meeting.

17:13So, you know, it's an interesting time. We could have one or two Fed governors dissenting. But largely speaking, we're probably going to see Fed Chair Powell really kind of keep his options open, maybe more of the same, calling for more economic data before they make a big move on rates. You cover the Fed. Are you hearing anything about all of this pressure and constant attention on Fed Chair Jay Powell, what it might be doing to him? I can't speak to exactly what it's doing to him. It is something that people are watching, is this mounting pressure on the Fed. It's not something that we have seen in recent times.

17:54But of course, it's not the first time that we've seen a president come after the Fed like this, or I don't want to say like this, but come after the Fed and try to influence what they do. But clearly, Powell has just kind of held his ground and been a staunch defender of the independence of the Fed. Would it be bad to say if there's going to be—oh, sorry, go ahead. I was just going to say, so is that it for criticism of Jay Powell? Do you think they kind of got to meet in person and things softened between them in person? Do we see the president lay off him a little bit? I can't speak for Trump, but I mean, I guess that would be surprising given how much he has said and how critical he has been.

18:35I mean, I don't anticipate that this will mean that he's going to stop calling for lower rates. Yeah, I wouldn't take that bet. Coming out of this in a big way. The handing of the papers is that iconic exchange. There's going to be something that comes out of this. Janelle, thank you so much. Janelle Marte covers the Fed here for Bloomberg News, joining us from D.C.

19:20That look like cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make health care work as one for everyone. Learn more at business.optum.com. Join Bloomberg for the Canadian Finance Conference proudly sponsored by National Bank of Canada Capital Markets on September 29th in New York. Hear from influential corporate and government leaders as they discuss the strategies shaping Canada's economic future. Connect with senior decision makers, gain actionable insights, and be part of the conversations driving business forward. Register at BloombergLive.com slash Canadian Finance.

19:58That's BloombergLive.com slash Canadian Finance.