Trump says he may allow lawsuit against Powell over Fed renovation

President Donald Trump said he is weighing a lawsuit against Federal Reserve Chair Jerome Powell over the renovation of the central bank’s headquarters, a project whose cost overruns have drawn scrutiny.

Trump in a social media post on Tuesday resumed his criticism of the Fed chair over the central bank’s decision to hold interest rates steady and again hammered Powell over the renovation work.

“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,” Trump said. “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.”

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White House Press Secretary Karoline Leavitt, when asked if the administration was considering suing the Fed chair over the renovation, responded “that’s what the president is saying.”

“He’s considering a lawsuit,” she told reporters at a briefing later Tuesday, adding that she would not speak on the matter further. “I will allow the president to do that himself.”

The yield curve steepened after Trump’s comments, with 10-year yields rebounding from the aftermath of Tuesday’s consumer price index numbers and hitting a session high.

Data released earlier Tuesday showed underlying inflation picked up in July, though prices of goods rose at a more muted pace, tempering concerns about tariff-driven price pressures and raising expectations for a Fed rate cut in September.

The renovation work has become a flashpoint in Trump’s pressure campaign against Powell and the central bank for not lowering borrowing costs and saw him tour the construction site last month in a rare presidential visit to the Fed’s headquarters. That visit saw a brief detente between Trump and Powell and the president appearing to downplay some of his concerns over the work there. 

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But that criticism resumed after Fed officials left interest rates unchanged in July, followed by a turbulent stretch in which Trump fired the head of the Bureau of Labor Statistics after a report earlier this month that showed a weakening US jobs market.

Trump has  repeatedly called for Powell to resign. At times, he has mulled whether he should outright fire him before saying he would wait out his term to avoid delivering a shock to markets. Treasury Secretary Scott Bessent is running a search for a candidate to replace Powell when the chair’s term is up in May with Trump expected to make his final announcement this fall, according to two administration officials. 

The president last week also seized on an earlier-than-expected opportunity to put his imprint on the central bank by tapping Stephen Miran, one of his top economic advisers, to serve as a Federal Reserve governor. 

Miran, who will need Senate confirmation, would only serve the expiring term of Fed Governor Adriana Kugler, which ends in January, allowing Trump more time to search for a permanent replacement.