Donald Trump is once again targeting Federal Reserve Chair Jerome Powell – this time with plans for a lawsuit. The reason? What he calls a grossly mishandled and outrageously overpriced renovation of the Fed’s Washington headquarters.

From $50 Million Renovation to a $3 Billion Megaproject

In a Tuesday post on his Truth Social platform, Trump announced he was preparing a “major lawsuit” against Powell. He claimed that a repair of the historic building, originally planned for $50 million, had turned into a massive $3 billion construction project under Powell’s leadership. According to Trump, Powell is “too late,” and his inaction has caused “incalculable damage.”

“Jerome ‘Too Late’ Powell must cut rates NOW,” Trump wrote, adding that a significant rate cut would save the U.S. huge sums of money and reduce debt obligations.

He also took a jab at his former Treasury Secretary Steven Mnuchin: “Steve ‘Manouychin’ really made me laugh when he pushed this loser aside,” referring to Powell’s 2017 nomination.

Lawsuit Threat as Another Weapon in the Rate-Cut Battle

Trump says the lawsuit is not only a reaction to alleged waste but also a way to maximize pressure on Powell to start cutting interest rates. The Fed, however, has kept rates steady this year despite several cuts in 2024, the final year of Joe Biden’s presidency.

In July testimony before Congress, Powell said the Fed would have loosened its monetary policy this year if not for Trump’s tariff policies, which he claimed were affecting economic conditions.

Trump’s criticism of Powell went public again last month during his visit to the Fed’s construction site. He claimed renovation costs had reached $3.1 billion – a figure Powell immediately disputed, saying, “That’s not something I’ve heard from anyone.” The Fed has defended the project, citing the need for modernization and preservation of historic features, with the cost increases blamed on construction issues and strict preservation regulations.

Search for Powell’s Successor Already Underway

While Trump is publicly pressuring Powell, his administration is quietly building a shortlist of potential successors when Powell’s term ends next year.

Names include Fed Vice Chairs Philip Jefferson and Michelle Bowman, Dallas Fed President Lorie Logan, former St. Louis Fed President Jim Bullard, and economic advisor Marco Sumerlin. According to Politico, candidates from the private sector are also under consideration.

Previous contenders remain in the mix – former National Economic Council Director Kevin Hassett, ex-Fed board member Kevin Warsh, and current board member Christopher Waller.

This gives Trump a broad spectrum of options, from experienced insiders to “outsiders” who could bring a fresh approach. The choice will be crucial – the next Fed Chair will inherit not only an institution with thousands of employees and oversight of the U.S. banking system but also a president pushing for rapid rate cuts while maintaining credibility in managing inflation. That’s a delicate balance that could easily turn into a political minefield.

#TRUMP , #Powell , #Fed , #USPolitics , #FederalReserve

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