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 go forward, dramatically escalating his efforts to pressure the central bank leader to immediately lower interest rates.
The president said on Truth Social that the lawsuit would relate to Powell’s management of major renovations at the Fed’s headquarters in Washington, D.C., which has become a focus of Trump’s criticism.
Trump’s post, which slammed Powell as a “loser” and branded him with the mocking nickname “Too Late,” did not make clear whether such a lawsuit was in the works. The White House did not immediately respond to CNBC’s request for comment.
“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, appearing to blame his first-term Treasury Secretary Steven Mnuchin for encouraging 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 Fed declined to comment on Trump’s post. But Powell and the Fed have previously defended the ongoing renovations of two historic buildings in D.C., and provided details about why costs have risen over the course of the projects.
Powell pushed back on Trump to his face last month, when the president visited the Fed building’s construction site and asserted that renovation costs have topped $3.1 billion.
“I haven’t heard that from anybody,” Powell said in response.
Trump has railed against Powell for months as he seeks to pressure the Fed to rapidly slash interest rates by multiple percentage points. Trump claims that doing so will save the U.S. vast sums of money and ease the nation’s burden as its long- and short-term debt comes due.
After raising the benchmark federal funds rate in 2022 in the wake of the Covid-19 pandemic, the Fed gradually cut 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. Powell said in congressional testimony in July that the Fed would have already eased monetary policy this year, if not for Trump’s tariff policies.
Fed officials had previously indicated they expect two rate cuts in total this year. Traders currently expect a quarter-point rate reduction following the Federal Open Market Committee’s September meeting, and expectations have risen for further cuts after subsequent meetings in October and December.
— CNBC’s Erin Doherty contributed to this report.
