Trump intends to file a lawsuit against Powell
In a recent turn of events, U.S. President Donald Trump has threatened to file a lawsuit against Federal Reserve Chair Jerome Powell, citing disagreements over the management of the Fed's headquarters renovation project and monetary policy.
However, no clear legal basis or formal lawsuit has been established based on available information. The lawsuit would require a plaintiff with standing and evidence of wrongdoing, neither of which have been publicly demonstrated.
Trump has criticised Powell's management of the renovation, calling it "horrible" and "grossly incompetent", and disputing the project's high cost. The renovation involves two historic Federal Reserve buildings in Washington, D.C., with the Fed and Powell defending the expenses as necessary structural updates approved by relevant authorities.
The cost of the renovation, according to Trump, should have been $50 million, not $3 billion. However, experts suggest that it would be difficult to establish standing or prove wrongdoing by Powell in this context.
Trump's criticism of Powell extends beyond the renovation project. He has demanded that Powell lower interest rates, stating that the damage Powell has caused by acting too late is immeasurable.
Despite the inflation rate remaining at 2.7 percent in July, financial markets anticipate a rate cut in September. The Federal Reserve, however, wants more clarity before making any changes to monetary policy, particularly regarding the impact of Trump's trade policies on inflation and the labor market.
It is important to note that the Federal Reserve is an independent central bank, with its decisions not directly influenced by the White House. This independence is crucial to maintaining the stability of the U.S. economy.
Powell's term as Federal Reserve Chair runs until May 2026, and there is no clear legal basis publicly detailed for President Trump's potential lawsuit against Powell.
References:
- Bloomberg
- New York Times
- CNN
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