President Donald Trump threatened to sue Fed Chairman Jerome Powell for his role in a $2.5 billion renovation at the Federal Reserve headquarters, amid the White House's growing frustration over interest rates.
On Truth Social, the President said, “The damage he has done by always being Too Late is incalculable.” He went on to add, “Fortunately, the economy is sooo good that we've blown through Powell and complacent Board.”
Trump threatened legal action against Powell for the “horrible, and grossly incompetent, job he has done in managing the construction of the Fed buildings.” Former Treasury Secretary Steven Mnuchin also drew the ire of Trump, who argues for pushing Powell as a candidate for the Fed Chair role. In his first four years, Trump offered praise for Powell and Mnuchin in their respective respective roles.
Per Fortune, Fed Chair Jerome Powell had previously admitted that the renovations would stir controversy, but were necessary. The high cost has been ascribed to the cost of preserving the building's historic architecture, while bringing “buildings into compliance with modern safety and accessibility codes.”
The cost was initially penned at $1.9 billion in 2021, but that was before inflation increased the price of everything. The current cost estimate for the renovation is $2.5 billion.
The building cost had only become the center of a political firestorm after Trump argued that the Fed needed to drop rates ‘immediately.' In recent weeks, some had worried that Trump seeked to fire Powell, a move which would seriously jeopardize the central bank's independence and introduce new volatility.
Trump decided to visit the Fed HQ and.see it himself, prompting a semi-heated back-and-forth with the President and Fed Chair on TV, after Trump argued the cost was “$3 billion” now. He became one of just a few Presidents in history to visit the central bank, later calling Powell, “a good man.”
The threat of ‘lawfare' is unlikely to move the needle at the Fed, though. Powell cannot reduce interest rates alone. Further, after today's inflation print, a 25 basis point cut is seen as a done deal for the September Fed meeting.
Until then, Trump has chosen to spar with other economists. At the start of August, he fired the head of the Bureau of Labor Statistics, replacing her with a loyalist this week. On Truth Social this morning, he also attacked Goldman Sachs and CEO David Solomon for “refus[ing] to give credit where credit is due” in regards to tariffs.
Trump has been shopping for the next Fed Chair, recently expanding his list of candidates to at least 10. Powell's term as Chair of the Federal Reserve is set to end in May 2026.
This story was originally published in our daily live blog, Stock Market Today. To see today's (Aug. 12) edition, click here.
