Donald Trump Threatens to Let Lawsuit Against Fed Chair Move Forward
Powell, one of twelve members on the Fed’s interest rate–setting committee, is set to remain chair until May 2026.
Quick overview
- President Trump is considering a lawsuit against Federal Reserve Chair Jerome Powell over costly renovations at the Fed's headquarters.
- The dispute highlights Trump's frustration with Powell's reluctance to lower interest rates amid economic pressures.
- Trump has publicly criticized Powell's handling of the Fed and has suggested replacing him with someone who aligns more closely with his economic policies.
- Recent economic data showing lower inflation has raised hopes for a potential interest rate cut at the Fed's upcoming policy meeting.
The complaint would center on renovations at the Federal Reserve’s headquarters, but behind it lies mounting pressure on the central bank to lower interest rates.
U.S. President Donald Trump threatened Tuesday to allow a “major lawsuit” to be filed against Federal Reserve Chair Jerome Powell over renovation work at the Fed’s main building. The Republican administration has been pressing Powell to cut interest rates, a move he has so far resisted.
Trump has grown increasingly impatient with the influential monetary institution, frequently insulting Powell—whom he appointed during his first term (2017–2021). He has even urged Fed governors to remove him from his post. In July, Trump personally inspected the renovations at the Fed’s Washington headquarters, calling the project excessively costly.
“I am considering allowing a major lawsuit against Powell due to his horrible and extremely incompetent handling of the Federal Reserve building renovations,” Trump posted Tuesday on his Truth Social platform.
The July visit sparked a direct confrontation between the two. Trump cited a document stating the renovation cost had reached $3.1 billion. Powell disputed that figure, claiming the Fed’s estimate was $2.5 billion. “Three billion dollars for a job that should have cost $50 million,” Trump reiterated Tuesday.
Interest Rates at the Core of the Dispute
Trump quickly made clear the deeper issue at play. “Jerome ‘Too Late’ Powell needs to cut rates now… The damage he has caused by always being too late is incalculable,” he added, calling Powell a “loser.”
The president has long been pressing the Fed to move faster on rate cuts to align with his trade-war policies and stimulate economic activity. Fed leadership, however, has maintained a cautious stance, warning that the inflationary impact of tariffs could take time to materialize.
Powell, one of twelve members on the Fed’s interest rate–setting committee, is set to remain chair until May 2026, though he could stay on as a board governor until January 2028. Trump has signaled his desire to replace him with someone more aligned with his economic agenda.
On Tuesday, fresh economic data showed July inflation at 2.7%—better than expected—boosting Wall Street’s hopes that the Fed will finally cut rates at its September policy meeting.
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