- Trump is threatening legal action over the Fed’s $3.1B renovation, calling it wasteful and mismanaged.
- The president is intensifying calls for immediate rate cuts, blaming Powell for economic “underperformance.”
- The dispute plays out against a backdrop of political maneuvering, legal threats, and the Fed’s upcoming September meeting.
President Donald Trump intensified his public pressure on Federal Reserve Chair Jerome Powell on Tuesday, threatening to let a lawsuit move forward over what he calls an egregiously overpriced $3.1 billion renovation of the Fed’s Washington, D.C., headquarters.
Trump’s remarks came in a Truth Social post, where he again blasted Powell for refusing to cut interest rates despite steady inflation, holding at 2.7% in July. Nicknaming him “Jerome ‘Too Late’ Powell,” Trump accused the Fed chief of causing “incalculable” economic harm by delaying rate cuts and claimed the renovation could have been completed for as little as $50 million.
Renovation Costs at Center of Dispute
The contested project involves updates to the Marriner S. Eccles Building and the adjacent FRB-East Building. The Fed has defended the renovations as necessary structural improvements, with plans approved in 2021 by the National Capital Planning Commission. Powell, during a July site visit with Trump, pushed back against the president’s claims that costs exceeded $3 billion, saying he hadn’t “heard that from anybody.”
Trump’s criticism suggests he views the renovation as a symbol of waste and mismanagement under Powell’s watch, using it to further his argument for removing the chair’s influence over interest rate policy.
Rate-Cut Pressure and Political Heat
Trump’s broader aim is to push the Fed toward rapid rate reductions. The benchmark federal funds rate remains between 4.25% and 4.5%, which Trump argues is suppressing economic growth. He has even urged the Fed’s Board of Governors to strip Powell of control if he resists immediate cuts.
The next scheduled FOMC meeting isn’t until September 17–18, meaning an emergency session would be required to alter rates sooner. Market watchers expect a quarter-point cut in September, with the potential for more in October and December.
Legal and Political Crosscurrents
It remains unclear who would file the lawsuit Trump referenced or on what grounds. The White House has not commented, and the Fed declined to respond to his latest remarks. Meanwhile, political tensions over Powell’s leadership have intensified, with Rep. Anna Paulina Luna (R-Fla.) earlier this month referring Powell to the DOJ over alleged misrepresentations tied to the renovation’s amenities and condition.
