Trump blasts Powell on interest rates

You're going to fire him? I think we should be-- no. I think we should be three points lower interest rate.

Sir, you're-- He's costing our country a lot of money. We should be number one, and we're not, and that's because of Jerome Powell-- in terms of interest. We are number one in the world. So let's go live to CBS News MoneyWatch Correspondent Kelly O'Grady. Kelly, we can talk about tariffs in Canada in just a moment, but I've got to ask you about something. We know that the president cannot fire Jerome Powell without cause. We've talked about that on air. But this headline this morning from Trump's Office of Management and Budget, Russell Vought, really caught my eye. He's accusing Powell of misusing taxpayer money. An accusation-- that's a big word-- accusation often leads to investigations. Is Trump laying the groundwork for a for-cause firing? Well, it is possible that this might be another way to put pressure on the Federal Reserve and Chair Jerome Powell, where just making requests to lower interest rates doesn't seem to be working at the moment. I did, though, do some legal digging because this is all about mismanagement of funds, that allegation being with the Federal Reserve's construction on their building. And he's saying, hey, it's run over budget. I want to play you some sound from the head of the Office of Management and Budget around why they're bringing these allegations. Look, we have substantial questions with the testimony he gave to the Hill in response to questions about the building. He has articulated that there have been material changes to the National Capital Planning proposal that was approved, and so we want to get to the bottom of his statements as compared to the various parts of the plant. That was the nature of my letter yesterday. Those are the types of questions that the commission will be asking in the coming weeks. So essentially he's saying, there's a mismanagement of funds because this has run over budget and that they haven't really stuck to the original plans. But, Reed and I, at some point our Zillow dreams will come true, and we will own homes, and everyone knows that renovations sometimes run over. And so I did some digging on whether there's legal cause for them to bring these allegations, and there's something called the Federal Reserve Act, and clause 10.3 allows the Fed to have ownership control over renovations and how much they pay on their building. So I ran this by a couple of legal scholars, and they tell me, based on the language in that act, there wouldn't be legal grounds to move forward, that these are allegations and just potentially pressure for some other things. Of course, interest rates being the other push that the White House is making with Chair Powell.

And even articulating. Three points, that's what the president wants. So let's talk tariffs, as promised, and Wall Street and the connective tissue there. It looks like investors are reacting to the headlines about President Trump and Canada. That's right. In fact, last night when the president posted on Truth Social that Canada was going to see a 35% tariff come August 1-- remember, there's a 25% tariff currently in place for those goods that aren't covered by that trade agreement-- I immediately went, let's see what's going on with the market. Of course, the market was closed at that point, but there's something called after-hours trading, and stocks were immediately falling. And I said, well, I'm going to be talking about this with my friend Reed tomorrow for sure. And investors aren't loving this because Canada is one of our biggest trading partners. They don't want to see a high tariff on everything from fuel to lumber to steel to aluminum. Remember, we've also got sectoral tariffs that would be on top of that with steel and aluminum. That being said, we have seen the back and forth with these two countries ad nauseam. Two weeks ago, we were here when the president walked away from negotiations with Canada. Monday, they were back on. So what I'm hearing is this is a negotiation tactic. They've also got that big trade agreement to be renegotiated, potentially next year. This could be the precursor to getting a better deal in the president's eyes come next summer. Well, we watch Canada, but the others see China. That is one I always watch for to see what happens there, to shore up a deal with China. Secretary of State Marco Rubio, he met with his Chinese counterpart this morning to talk about trade. What do we know about that meeting, especially anticipating that China could really be the big prize here in striking a deal? It absolutely is. And remember, we've got a framework of a deal, that 30% tariff on Chinese goods coming into the country, as well as a number of other things, concessions that they've given, access to rare-earth minerals and magnets. That meeting, though-- essentially Rubio came out. He talked to reporters, and he said, well, it looks like there's, quote, "potential for collaboration." Not, I think, as firm as investors would have wanted to see. But he also did say-- and didn't reveal any specifics and said trade wasn't necessarily the focus of that meeting. There were a number of other things, national security, et cetera, that they were talking about. So we're still waiting, Reed. All right. From framework to finalization, it seems like you and I could drive one of those big shipping containers right through that and also have a lot to talk about. Kelly O'Grady, nice to talk to you today. I hope you have a good weekend. Take care.