Charles Esther
On Tuesday, President Donald Trump intensified his criticism of Federal Reserve Chairman Jerome Powell, warning that he may allow a “major lawsuit” against him to proceed.
The dispute centers on Powell’s handling of costly renovations at the Federal Reserve’s Washington, D.C., headquarters and Trump’s ongoing demand for immediate interest rate cuts.
Accusations Over Renovation Costs
In a Truth Social post, Trump accused Powell of overseeing “grossly incompetent” construction management, claiming the project’s $3 billion cost should have been closer to $50 million.
Trump has repeatedly blasted the renovation expenses, which the Fed says are necessary to preserve historic buildings and meet operational needs.
Public Rebuke and Past Appointments
Trump mocked Powell as “Jerome ‘Too Late’ Powell” and criticized former Treasury Secretary Steven Mnuchin for encouraging his 2017 nomination.
He argued that Powell’s delays in lowering rates have caused “incalculable” economic damage, even as Trump claimed the U.S. economy remains strong enough to “blow through” the Fed’s decisions.
White House Declines Details on Potential Lawsuit
White House press secretary Karoline Leavitt would not elaborate on the possible lawsuit, stating only that Trump is “considering” it and will speak on it himself.
The Federal Reserve declined to comment on Trump’s statements.
Powell Pushes Back on Cost Claims
Powell has previously disputed Trump’s claims about the renovation budget, saying during a recent site visit that he had “not heard” of costs exceeding $3.1 billion.
The Fed maintains that project costs have risen due to necessary upgrades and historic preservation requirements.
Ongoing Pressure for Interest Rate Cuts
Trump has pressed Powell for months to slash interest rates by several percentage points, arguing that it would reduce U.S. borrowing costs and benefit the economy.
Despite multiple cuts in 2024, the Fed has held rates steady throughout 2025.
Tariffs at the Center of Fed’s Decision
In July congressional testimony, Powell said the Fed might have already cut rates this year if not for Trump’s tariff policy.
Fed projections from June suggest two rate cuts could still occur before year’s end.
Market Expectations Shift Toward September Rate Cut
Traders currently expect a quarter-point reduction in the federal funds rate after the September Federal Open Market Committee meeting, with additional cuts possible in October and December.
Political and Economic Stakes Remain High
The standoff between Trump and Powell blends fiscal policy disputes with personal criticism, heightening political tensions as economic policy decisions loom.
History of Clashes Between Trump and the Fed
This is not the first time Trump has publicly pressured the central bank.
During his first presidency, he often criticized Powell for being too slow to act on interest rates—a pattern now resurfacing in his second term.
David Awoyode