WASHINGTON — 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.
Trump has criticized Powell for months because the chair has kept the short-term interest rate the Fed controls at 4.3% this year, after cutting it three times last year. Powell says the Fed wants to see how the economy responds to Trump’s sweeping tariffs on imports, which Powell says could push up inflation.
Powell’s caution has infuriated Trump, who has demanded the Fed cut borrowing…
