WSJ What’s News - The Office Renovation at the Heart of Trump’s Campaign Against Powell

Episode Date: July 17, 2025

P.M. Edition for July 17. Legal experts are dubious that President Trump could remove Fed Chair Jerome Powell—though the president has said he isn’t planning to. But as WSJ chief economics correspondent Nick Timiraos points out, Trump’s advisers are seizing on a renovation of the Federal Reserve’s Washington, D.C. headquarters to undermine public trust in Powell. Plus, China has threatened to block the sale of two Panama Canal ports unless its state-owned shipping company can be a part of it. WSJ reporter Jack Pitcher discusses China’s leverage, and what the U.S. makes of it. And Republican lawmakers are making a surprising push to protect unauthorized immigrants. WSJ congressional reporter Olivia Beavers explains why. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

No Frills delivers. Get groceries delivered to your door from No Frills with PC Express. Shop online and get $15 in PC Optimum Points on your first five orders. Shop now at nofrills.ca. How a building renovation is at the center of President Trump's effort to oust Fed Chair Powell. This is a credible threat to possibly effort to oust Fed Chair Powell. This is a credible threat to possibly try to remove the Fed chair.

This could be a pretext to try to fire Powell and say, well, this isn't over interest rates, this is over mismanaging your building costs. Plus, why some Republican lawmakers are pushing to protect unauthorized immigrants. And China is threatening to block the sale of Panama Canal ports unless its shipping giant can get in on it.

It's Thursday, July 17th. I'm Alex Osoleff for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. We kick off this evening's show with some business news. Meta platform shareholders who brought a data privacy case against current and former Meta officials have agreed to settle, ending the trial on its second day. The settlement means high-profile Meta executives and board members will avoid testifying about their response to the Cambridge Analytica scandal. In 2018, a group of company shareholders sued some members of the board

of what was then known as Facebook, alleging that the directors didn't ensure the company protected its users' data. That, they allege, led UK data firm Cambridge Analytica to improperly access information from millions of Facebook users. A meta-spokesman declined to comment, and lawyers for the defendants and shareholders

didn't immediately return requests for comment on the settlement terms. And U.S. regulators have authorized Juul Labs to keep its e-cigarettes on the U.S. market. That's good news for the vaping company, which was pushed to the brink of bankruptcy after a 2022 federal ban. A spokeswoman for the Department of Health and Human Services said that the Food and Drug Administration determined that the product's benefit to adult cigarette smokers outweighed any potential public health risks, including to young people. The move gives the green light to Juul's original vaporizer, along with refill cartridges in tobacco and menthol flavors.

Investors welcomed better-than-expected retail sales and weekly jobless claims. June's 0.6% rise in sales largely reversed May's drop, suggesting tariff-driven price rises and uncertainty aren't deterring shoppers. Major U.S. indexes ended up today. The Nasdaq rose about three-quarters of a percent, and the S&P 500 ticked up about half a percent, both hitting new records. The Dow also rose about half a percent and the S&P 500 ticked up about half a percent, both hitting new records. The Dow also rose about half a percent. Netflix has raised its revenue and operating margin forecast for the year, continuing a

strong run that has propelled its shares to new heights. Reporting after the bell, Netflix said member additions, price increases, and its growing ad business drove revenue in the second quarter. President Trump's aggressive deportation policies are having an impact on, among other industries, U.S. agriculture. Immigration experts estimate that roughly half of the more than 2 million people employed on farms in the U.S. are working in the country illegally. Now that's leading to a surprising Republican-led push in Congress seeking protection for unauthorized immigrants. Olivia Beavers covers Congress for the Wall Street Journal

and joins me now from the US Capitol. Olivia, what is the argument that some of these Republican lawmakers are making as they look to reform some of these immigration laws? What we first began to hear was Republicans were saying, we long believed we needed to secure the border before we started talking about fixing the immigration system. And they are arguing that now that President Trump has had dramatic decreases at the border, they've been aggressive with their deportation, they think now is the time the party can start

discussing and moving towards policy. They want to see changes to specific processes and visas that relate to the agriculture industry. Yeah, what are the law changes that they're looking to make? Some of the things that we talked about, some of the workers that they have might be seasonal, but they have to go back to their homes. And that wouldn't really work for dairy farms where they need workers year round. There are certain loopholes through eligibility tools that the government uses like e-Verify. There are some sort of questions about that, which has created issues with different farms seeing their workforce being deported when they thought they had verified their eligibility.

So they were arguing that there's just some flaws in the current systems with the H-2A visas, with the TN visas. So trying to work through those to not create amnesty, but to give more of a temporary status to these workers that these farms, ranches rely on. What does the White House say about this? We got a statement back from the White House and it says, President Trump loves and trusts the farmer communities. I'm summarizing this, but he's also not going to grant amnesty. But you're kind of doing a little bit of a dance here where the agriculture focus lawmakers

are not talking about amnesty. They're talking about working through and fixing what they think are some flaws in the system to create temporary status. Now the party doesn't all believe in this, but they're warning that if the flaws aren't fixed, if the agriculture community can't rely on their workforce, you're going to see labor costs go up, you're going to see food prices go up, there's going to be food insecurity. So they have a lot of warnings, essentially.

That was WSJ Reporter Olivia Beavers. Thanks, Olivia. Thanks. The Justice Department has fired federal prosecutor Maureen Comey, who was involved in a number of high-profile criminal cases, including those of sex offender Jeffrey Epstein and his associate Ghislaine Maxwell. That's according to people familiar with the matter.

Comey is the daughter of former FBI Director James Comey, who became a prominent critic of President Trump after being fired during his first term. The reason for Maureen Comey's firing wasn't immediately clear. The US Attorney's office in Manhattan, where she worked for a decade, declined to comment. Maureen Comey couldn't immediately be reached for comment.

The move comes as some members of Trump's base remain incensed over the Justice Department's decision to backtrack on a promise to release more material from the FBI investigation into Epstein, who died by suicide in jail in 2019 while awaiting trial on federal sex trafficking charges. Coming up, the pressure campaign on the Fed over the renovation of its headquarters. That's after the break. Why just survive back to school when you can thrive by creating a space that does it all for you, no matter the size? Whether you're taking over your parents' basement or moving to campus, IKEA has hundreds

of design ideas and affordable options to complement any budget. After all, you're in your small space era. As we reported yesterday, President Trump said it was highly unlikely that he would get rid of Federal Reserve Chair Jerome Powell unless, the president said, he has to leave for fraud. The White House is pointing to the Fed's $2.5 billion renovation of its headquarters as a concrete example of government waste. WSJ Chief Economics correspondent Nick Timoros says the building renovation project is not new. If you go to Washington, D.C. right now, you can see these construction cranes on the skyline.

This is a years-old project. It's very expensive. So this issue is sort of lying in plain sight, and it came up at a congressional hearing last month where Senate Republicans asked Powell about the high building costs, the overruns on the budget, and some of the high-gloss finishes.

Powell responded defensively, saying, well, hold on, some of the high gloss finishes. Powell responded defensively saying, well, hold on, some of these media reports about these fancy finishes just haven't been accurate. And that is what ignited this recent maelstrom of controversy over the buildings. The White House last week in a letter to Powell raised a series of what did you know and when did you know them questions, suggesting Powell might not have been truthful about his answers, the Fed says that he was, suggesting that maybe the Fed didn't properly update their design plans with the local building authorities.

And so now it has become kind of a classic Washington controversy. The Fed says the project has faced costs overruns in part because of unforeseen construction conditions, such as more asbestos than anticipated, toxic contamination in the soil, and a higher-than-expected water table. Legal experts doubt the administration has grounds for a court-sanctioned removal of Powell,

suggesting the real strategy might be to inflict enough political damage that Powell either resigns or becomes more accommodating on interest rates. Nick Timuros says the mechanics of removing Powell could prove difficult. Nick Timmeros, Director of the Federal Reserve Department of State, This is a credible threat to possibly try to remove the Fed share. The courts have said you can't do it over policy dispute, but you can do it for cause, which courts have generally interpreted as malfeasance or dereliction of duty. So this could be a pretext to try to fire Powell and say, well, this isn't over over interest rates this is over mismanaging your

building costs. Let's say Trump posts online that he is firing J Powell. What happens next? No one really knows. It would be very messy. The Fed owns their own buildings. They have their own police force. They are self-funded. So that would provide some degree of protection to Powell that he could continue to go to work until either a court rules, if he challenges this in court, until the Senate confirms his successor, or until his colleagues on the Board of Governors no longer recognize him as the chair.

But it would be an institutional debacle, the likes of which we've never seen before. In the last few days, CEOs of banks such as Goldman Sachs, JP Morgan, Bank of America, and Citigroup have come out to emphasize the importance of maintaining the Fed's independence, given the president wants Powell's successor to show a commitment to lowering interest rates.

Nick Timuros says that independence is crucial for the Fed to do its job. If you mess with the Fed's independence to get lower short-term interest rates, which is what happens when the Fed to do its job. If you mess with the Fed's independence to get lower short-term interest rates, which is what happens when the Fed cuts interest rates, you could drive up longer-term interest rates. That could be bad for the economy, it could be bad for the banking system,

it would be bad for financial markets. And so you're starting to see some of these stakeholders say, hold on here, don't go down this path. We're exclusively reporting that China's government is threatening to block a deal that would transfer ownership of dozens of seaports to Western investors if Costco, China's largest shipping company, doesn't get a stake. Their proposed sale includes two ports at the Panama Canal and more than 40 others around

the world, all owned by Hong Kong-based CK Hutchison. According to people familiar with the deal talks, China is pushing for state-owned Costco to be an equal partner and shareholder of the ports with BlackRock and containership operator Mediterranean Shipping Company. Jack Pitcher covers the asset management industry for the journal and joins me now. Jack, how much leverage does China have in this situation? China does have several levers it could pull to block this deal. And this deal has become one of several chips going on in broader U.S.-China relations between

the trade war and a proposed sale of TikTok and now this ports deal. China has the ability to make CK Hutchison's life miserable if it wants to through various business levers and Hutchison's mainland China dealings. They're probably not going to agree to a sale that China is vehemently opposed to for that reason. President Trump has been very focused on the Panama Canal. So how does this sort of shift in the negotiations for this deal look to the US? Trump was very happy when this initial deal was announced.

And now the terms that are being discussed potentially involving a Chinese state-run company seem quite different than what was originally outlined. We haven't heard a reaction yet from Trump or the White House on this, but most people we've spoken to imagine he would not be pleased hearing about a deal where China's government essentially has an ownership stake. There's worry in the White House that a hostile Chinese government could choose to try and weaponize their ownership through a state-run company of Panama Canal ports to rip off U.S.-bound ships or close things off altogether.

Nothing like that has happened so far, but it's a scenario they consider. That was WSJ Reporter Jack Pitcher. Thank you, Jack. Thank you. And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Bansi and Pierre Vianamé with supervising producer Michael Kosmides. I'm Alex Osala for The Wall Street Journal.

We'll be back with a new show tomorrow morning. Thanks for listening.