U.S. President Donald Trump speaks next to Federal Reserve Chair Jerome Powell during a tour of the Federal Reserve Board building, which is currently undergoing renovations, in Washington, D.C., U.S., July 24, 2025.
Kent Nishimura | Reuters
President Donald Trump on Tuesday threatened to allow a “major lawsuit” against Federal Reserve Chairman Jerome Powell to proceed, escalating his pressure on the central bank leader to cut interest rates.
Trump said in a Truth Social post that the suit would relate to Powell’s management of pricey renovations at the Fed’s headquarters in Washington, D.C., which the president has previously criticized.
Trump did not say when that suit could be filed or by whom.
“Jerome ‘Too Late’ Powell must NOW lower the rate,” Trump wrote in the post.
“Steve ‘Manouychin’ really gave me a ‘beauty’when he pushed this loser,” Trump wrote, referring to his first-term Treasury Secretary Steven Mnuchin having encouraged him to nominate Powell as Fed chair in 2017.
“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 claimed.
“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!” he wrote.
The White House did not immediately respond to CNBC’s request for comment on the president’s post.
The Fed declined to comment on Trump’s post.
Powell and the Fed have previously defended the ongoing renovations of two historic buildings in D.C., which house the central bank, and explained why costs have risen during the projects.
Powell pushed back on Trump to his face last month when the president visited the construction site and claimed that renovation costs had topped $3.1 billion.
“I haven’t heard that from anybody,” Powell said then.
Trump has railed against Powell for months as he pressured the Fed to quickly slash interest rates by multiple percentage points.
Trump claims that doing so would save the United States vast sums of money by reducing the cost of borrowing to finance government operations.
After raising the benchmark federal funds rate in 2022 in the wake of the Covid-19 pandemic, the Fed gradually cut interest rates multiple times in 2024, the final full year of President Joe Biden’s term in office.
But it has kept rates steady throughout 2025 so far, defying Trump’s demands.
In congressional testimony in July, Powell said that the Fed would have already cut rates this year if Trump had not implemented his major tariff policy.
Fed officials in June indicated that they expect two rate cuts this year.
Traders currently expect a quarter-point rate reduction following the Federal Open Market Committee’s September meeting. Expectations have risen for further cuts after FOMC meetings in October and December.
— CNBC’s Erin Doherty contributed to this report.
