President Donald Trump on Tuesday threatened to let a “major lawsuit” proceed against Federal Reserve Chairman Jerome Powell, intensifying his push for lower interest rates. Trump said the potential suit would center on Powell’s handling of costly renovations at the Fed’s headquarters in Washington, D.C., a project he has repeatedly criticized.
Trump did not specify a timeline or the party who might file the lawsuit but made his frustrations clear in a Truth Social post, urging Powell to cut rates immediately.
In his post, Trump accused Powell of causing “incalculable” damage by acting too slowly on rate cuts, while adding that the economy’s strength had offset Powell’s decisions. He also pointed to the renovation project, calling it “grossly incompetent” and claiming that $3 billion had been spent on work that should have cost $50 million.
Trump noted that former Treasury Secretary Steven Mnuchin had pushed him to appoint Powell in 2017, a decision he now openly regrets.
White House and Fed Responses
White House press secretary Karoline Leavitt declined to elaborate on the possible lawsuit, saying only that Trump is considering it and will speak on the matter himself.
The Fed has not commented on Trump’s post. Powell and Fed officials have previously defended the renovation costs, citing the historic nature of the buildings and the reasons for increased expenses.
Last month, during Trump’s visit to the construction site, Powell pushed back on the president’s claim that the renovations had topped $3.1 billion, saying, “I haven’t heard that from anybody.”
Trump has repeatedly demanded aggressive rate cuts, arguing they would save the government large sums in borrowing costs. Since raising rates in 2022 after the COVID-19 pandemic, the Fed cut rates multiple times in 2024 under President Biden’s administration, but has kept them steady throughout 2025.
Powell testified in July that the Fed might have cut rates this year if Trump had not enacted his major tariff policy. In June, Fed officials projected two rate cuts in 2025. Market expectations currently point to a quarter-point cut after the September Federal Open Market Committee meeting, with additional cuts possible in October and December.
What The Author Thinks
Trump’s lawsuit threat feels less about legal action and more about keeping political pressure on the Fed. The renovation cost figures are staggering, but without transparent breakdowns, it’s hard to know if the criticism is fully justified or simply strategic. Either way, the clash between Trump and Powell is as much about public perception as it is about policy decisions.
Featured image credit: Heute
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