The Trump Administration's Showdown with Powell: A Global Deluge Triggered by Renovations

Original Title: "A Global Flooding Triggered by a Renovation"

Original Source: C Labs Crypto Watch

Regarding the recent rumors of Powell's resignation, it is said that the pressure that forced him to resign did not stem from any high-profile economic policy, but rather from an issue with the Fed building's renovation.

Since Powell took office in 2018, the renovation of this building has not been completed even after nearly 8 years.

The budget has skyrocketed from the initial $1.5 billion to the current $2.6 billion. As the Fed is independent, it can approve its own expenditures, spending however it wants. Surprising, right?

Trump is quite cunning. Seizing on this issue, he believes Powell is at fault and is prepared to hold him accountable. The U.S. President's Office of Management and Budget has even prepared a letter:

This letter from the White House states that the President is "extremely concerned" about Powell's "wastefulness with taxpayer funds and extravagance," with the project costs overshooting by over $700 million, including: a rooftop garden, a VIP private restaurant, deluxe elevators, water features, high-end marble, and more.

On average, each employee will occupy 512 square feet of office space, far exceeding the OMB's recommended standard (150 square feet) and significantly higher than other federal agency renovation projects.

It is also pointed out that the Fed headquarters (Eccles Building) underwent a comprehensive renovation from 1999 to 2003, so spending this much money again is truly wasteful. Many people may not have a concept of the Fed spending $2.6 billion on renovations. This expenditure ranks second globally in terms of renovation costs, only behind the Pentagon!

And the Pentagon's area is several times larger than that of the Fed building.

By area, the Martin Building + Eccles Building + associated extensions total approximately 100,000 square meters, with a renovation cost of $26,000 per square meter!

Here are a few photos of the Fed building after renovation. Take a look and see if it's worth the high price.

Some may still think that even if Powell resigns, he is still a member of the Federal Reserve Board. Federal Reserve Board members have a 14-year term, and they can only be replaced every two years.

However, in reality, Federal Reserve Board members often resign. Since 2000, the Federal Reserve has had a total of 23 board members, with 15 resigning early, with an average tenure of only five to six years. Therefore, after Trump ousts Powell, the new Federal Reserve Board members are likely to experience a major turnover.

Trump has made it clear that he wants rates to be lowered by at least three percentage points from their current level.

Such a large rate cut is sure to trigger global liquidity easing.

The general public probably couldn't even dream that this round of monetary easing is due to this renovation.