Federal Reserve follies

The president is supposed to fire a Federal Reserve chairman only for cause, and now Donald Trump has it. An obstinate Jerome Powell is holding interest rates artificially high as he constructs a palace for himself.

New economic data bolsters the case for relief. On Tuesday, the Bureau of Labor Statistics announced that inflation remained under control at an annual rate of 2.7%. By Joseph R. Biden’s fifth month in office, the annual increase in consumer prices was twice as high. Despite runaway inflation in the former president’s term, the Fed kept rates implausibly low until his second year.

Then, in mid-September, Mr. Powell made a massive in-kind contribution to the Kamala Harris campaign by slashing interest rates by half, stimulating the economy in the home stretch of the presidential race.

Today’s economic situation is far brighter than it was a year ago. Energy costs are dropping, and that’s one of the most important factors in keeping commerce humming. Fuel commodity prices are down nearly 8% for the year, which means shipping goods across the country and filling up at the pump are more affordable.

“We have no inflation. We have cash pouring in. … I don’t need 5,000 people working behind the scenes like Jerome Powell to tell him what he should say once a month. Because they got it wrong. The Fed got it wrong. … Every [interest rate] point costs us $360 billion. Think of that,” Mr. Trump said.

Under its dual mandate, the Fed is compelled to consider employment figures, which are equally strong. More than 147,000 new jobs were added in June, and unlike prior reports, these were real gigs for U.S. citizens. Employment numbers are no longer being juiced by the rapid expansion of the federal workforce and a flood of cheap, illegal labor.

“I think if Jerome Powell stepped down, it would be a very good thing. He should. Jerome Powell’s been very bad for our country. We should have the lowest interest rate on earth, and we don’t. He just refuses to do it, yet he’s spending $2.5 billion rebuilding the Fed, the Federal Reserve building,” Mr. Trump said.

The commander in chief noted that Mr. Biden’s team authorized the splurge, ably documented in a recent Mercatus Center report. The opulent price tag came from the addition of glass atriums, skylights, VIP dining rooms, water features and rooftop garden terraces to complement the 688,000 square feet of new space.

Each economist will relax with an average of 700 square feet of space in the reconstructed, marble-lined facility on the National Mall. In Senate Banking Committee testimony last month, Mr. Powell denied that the luxury amenities were included in the current plans.

That raised red flags for Office of Management and Budget Director Russell Vought, who points out that such plans must be approved by the National Capital Planning Commission. The latest version on file still shows rooftop garden terraces and private elevators for VIPs.

Mr. Vought demanded clarification from the chairman and threatened to halt construction immediately if the project proves to be in violation of the law. “Thank you for your prompt attention to this matter,” he wrote.

No wonder rumors are swirling that Mr. Powell is considering resigning before his term expires in May. On Wednesday, Mr. Trump suggested that he was willing to wait a few months, but it wouldn’t be a surprise if he shoved Mr. Powell out of his newly gilded door.