President Donald Trump has said he’s considering letting a major lawsuit move forward against Federal Reserve Chair Jerome Powell over the skyrocketing renovation costs of the Fed’s headquarters.
Trump slammed Powell for what he called a “horrible, and grossly incompetent” job overseeing the construction, claiming the expenses have ballooned to nearly $3 billion, far beyond what he thinks should have been a $50 million fix.
Trump shared his criticism on Truth Social, calling Powell “Too Late Powell” and renewing his call for the Fed to cut interest rates immediately to help the economy.
Jerome “Too Late” Powell must NOW lower the rate. Steve “Manouychin” really gave me a “beauty”when he pushed this loser. The damage he has done by always being Too Late is incalculable. Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board. I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings. Three Billion Dollars for a job that should have been a $50 Million Dollar fix up. Not good!
What’s behind the lawsuit against Powell?
The lawsuit centers on accusations that the Fed blew way too much money on renovating its buildings, something Trump says shows bigger problems with how Powell is running things.
The case hasn’t been officially filed yet, but it’s definitely on the table, adding more heat to the ongoing clash between Trump and the Fed.
Powell fired back, saying Trump’s numbers aren’t quite right, some of those renovation costs go back to work done years ago, so the claims don’t tell the full story.
This whole back-and-forth just shows how tense things are between the White House and the Fed right now, especially since rates haven’t budged and Trump and some others think they should be coming down to help the economy.
This kind of legal showdown is pretty rare in US politics. Going after a sitting Fed chair in court could open a whole new can of worms around the independence of the central bank something experts say is crucial for keeping monetary policy stable and credible.
Some legal pros worry this might kick off a trend where politicians try to strong-arm the Fed through lawsuits.
What’s at stake in the Fed-White House clash?
People watching the markets are divided. Some think Trump’s move is mostly political theater, but others worry that a drawn-out battle between the White House and the Fed could shake investor confidence, especially if it looks like the Fed’s independence is being threatened.
For now, the lawsuit is still being weighed, but the strong words from Trump’s team suggest a decision might be just around the corner.
This adds another layer of political pressure on Powell, who’s already facing criticism not just over spending, but also on whether he’ll shift interest rates before upcoming key economic reports.
Analysts point out that, no matter how this plays out, the whole episode highlights how US monetary policy is getting more and more politicized, showing just how tangled economic decisions have become with the political battles of the day.
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