The US president has pressured Powell to lower interest rates and criticised him for the cost of renovating the Federal Reserve.
US President Donald Trump suggests that Federal Reserve Secretary Jerome Powell could face a lawsuit over the costs of renovations to the central bank’s headquarters almost a century ago.
The threat published Tuesday in a Truth Social post is the latest salvo in Trump’s ongoing pressure campaign against central bank leaders.
The two collided with interest rates. Trump is sought offensive cuts, and Powell keeps banks making decisions based on financial indicators rather than political pressure.
“Jerome ‘too late’ Powell now has to lower the rate,” Trump wrote in a message Tuesday. “But I’m considering allowing a massive lawsuit against Powell to proceed for the horrific, grossly incompetent work they went to in managing the construction of the Fed’s building.”
The president’s attack on Powell has been a source of concern for economic observers who are worried that Trump may be trying to undermine central bank independence and align more closely with his political priorities.
Asked about the possible lawsuit Tuesday, White House spokesman Caroline Leavitt declined to provide further details.
“At this point, the president is considering a lawsuit against the Fed. I’ll leave it to him to comment further on that,” she said at a press conference.
Trump said it was cost overruns caused by construction work at Washington, D.C.’s bank headquarters, referring to Powell’s “incompetent.”
The Federal Reserve is currently undergoing renovations to two historic buildings built in the 1930s, including asbestos removal, key structural work to meet modern safety standards, and replacing outdated systems for ventilation, plumbing, electricity and fire detection.
“Although regular work has been done to make these buildings occupyable, neither of them has seen comprehensive renovations since they were first built,” Powell wrote in a letter to the Trump administration on July 17.
“Both buildings needed critical structural repairs and other updates to make the building a safe, healthy and effective workplace.”
However, although initially estimated that the renovation project would cost $1.9 billion, the number increased to around $2.5 billion as construction progressed. Some Republican lawmakers have said they could open a survey on rising forecast costs, and Trump has used renovations to push Powell to step down.
Trump also strongly pushed for a rate drop, with Powell dubbing it with the nickname “too slow” due to delays in the reduction rate.
Powell’s term as Federal Reserve Chair will end in May 2026. Trump nominated Powell for the role during his first term, but has already suggested he is considering replacing the chair he entrusts to a more compliant person.
“The damage he has done by being too late all the time is immeasurable,” Trump said Tuesday. “Fortunately, the economy is so good that we blew Powell and the committee of self-complaint.”
Meanwhile, Federal Reserve Powell and economic policymakers have expressed concern over Trump’s aggressive tariff policy, claiming that inflation could be increased in the coming months.
Data released Tuesday by the U.S. Labor Bureau said consumer inflation rose 2.7% over the 12 months that close in July. That number has increased by 0.2% from June.
The Federal Reserve aims to keep inflation below 2%, and if inflation exceeds that number, it usually doesn’t cut interest rates.
