President Donald Trump has escalated his criticism of Federal Reserve Chair Jerome Powell, threatening to allow a “major lawsuit” against him over the central bank’s multibillion-dollar headquarters renovation—and again pressing for an immediate interest-rate cut.
In an Aug. 12 post on Truth Social, Trump renewed his name-calling of the Fed chief as Jerome “Too Late” Powell, and said he “must NOW lower the rate,” accusing Powell and the rate-setting Federal Open Market Committee (FOMC) of doing “incalculable” damage to the economy by not lowering interest rates.
Trump and his top economic advisers have repeatedly pushed the Fed to reduce its benchmark federal funds rate from its current range of 4.25–4.50 percent. The president has argued for rates of 0.25–1.75 percent, similar to those in countries such as Japan and Switzerland, to spur growth and reduce federal borrowing costs.
Powell has said rate cuts will come only when the Fed is confident that inflation will not rise as a result of the administration’s tariffs. He also has rejected the argument that the Fed should consider government debt-servicing costs—which are a bigger burden when the fed funds rate is higher—in its decisions on interest rates.
Investors widely expect that the Fed will lower interest rates by a total of 50 basis points during the next two meetings, in September and October, with the odds of a rate cut jumping sharply after the latest employment data showed that job growth had slowed significantly and as several Fed officials warned that high rates could damage the labor market.
In his Truth Social post on Tuesday, Trump said the economy was doing well despite Powell’s and the FOMC’s reluctance to cut rates, before mentioning a potential lawsuit against the Fed chief.
“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,” Trump wrote. “Three Billion Dollars for a job that should have been a $50 Million Dollar fix up. Not good!”
Trump was referring to controversy over the cost of renovations at the Marriner S. Eccles Building in Washington, which the Office of Management and Budget (OMB) estimates at about $2.5 billion—roughly $700 million over the initial budget approved in 2017. Trump and some senior aides have said the cost is closer to $3 billion, citing overruns for features such as terrace gardens, water features, and “premium marble.”
Fed officials have defended the project, saying much of the work involves replacing obsolete systems dating to the 1930s and removing hazardous materials. The agency has denied claims it is adding VIP elevators or dining rooms.
The dispute over the cost overrun flared last month during a joint tour of the construction site, when Trump told Powell the price tag had jumped to $3.1 billion. Powell disputed that figure, saying he had not heard it from Fed staff, and later clarified that part of the president’s calculation included a third building completed years earlier.
The Epoch Times has reached out to both the White House and the Federal Reserve for comment on Trump’s remarks about Powell and the lawsuit, and the demand for an emergency rate cut.
The president’s latest criticism of Powell and the Fed comes after a rare dual dissent at the July 30 FOMC meeting, when Federal Reserve governors Michelle Bowman and Christopher Waller voted to cut rates by a quarter point while the majority opted to hold policy steady. It was the first time since 1993 that two Fed governors broke with their colleagues on a rate decision.
Bowman said in an Aug. 1 statement that delaying action risked “a deterioration in the labor market and a further slowing in economic growth,” pointing to softening consumer demand, a cooling housing market, and rising credit card use among lower-income households. She noted that job gains are now concentrated in less cyclical sectors such as health care and social services and warned the labor market is “less dynamic” and increasingly fragile.
Waller argued that tariffs are “one-off increases in the price level” that should be “looked through,” saying the Fed’s current stance is “more restrictive than needed” given slowing economic growth and inflation near its 2 percent target. “When labor markets turn, they often turn fast,” he said, cautioning that waiting for more tariff data could leave the Fed “behind the curve.”
Both pointed to weakening hiring trends, with government data showing July payrolls rose by just 73,000—well below forecasts—and prior months revised sharply lower. The string of downward revisions suggests hiring momentum has slowed more than previously thought, fueling concerns that high borrowing costs are weighing on growth.
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