Trump Threatens Legal Action Against Federal Reserve Chief
In a move that could escalate tensions between the White House and the Federal Reserve, President Donald Trump has threatened to allow a lawsuit against Federal Reserve Chairman Jerome Powell, alleging mismanagement of a $3.1 billion building renovation project at the Fed.
The project, initially estimated at $50 million, has become a point of contention for Trump, who claims that the costs should have been much lower. However, it remains unclear if Trump has formally filed a lawsuit against Powell, with reports suggesting that he is merely considering allowing a major lawsuit to proceed.
Trump's criticism of Powell extends beyond the Fed building project. He has been publicly critical of Powell's monetary policies, particularly his decisions on interest rates. In a post, Trump referred to Powell as "Jerome 'Too Late' Powell," reflecting his dissatisfaction with the Fed Chair's rate decisions.
The U.S. President has also claimed to have the support of Republicans in the House of Representatives for Powell's resignation, although no specific details about this have been reported.
It's worth noting that the federal funds rate, which has been maintained at a range of 4.25-4.5% annually since December 2024, has not been affected by these developments. Inflation in the U.S., which stood at 2.7% in July, the same as in June, also remains stable.
Reuters reported that Trump is considering candidates for Powell's replacement, with Fed Governor Christopher Waller being named a favourite among Trump's advisors for the position. However, the article does not provide any updates on the status of Stephen Moore's nomination as a temporary candidate for the Fed's board, which was announced in 2019.
As this story continues to unfold, it remains to be seen how these developments will impact the relationship between the White House and the Federal Reserve, and whether Trump will indeed proceed with a lawsuit against Powell.
[1] Source: CBS News [2] Source: Bloomberg
- The ongoing discord between President Donald Trump and Federal Reserve Chairman Jerome Powell, stemming from policy-and-legislation and politics, has led to Trump's threat of a potential lawsuit over the $3.1 billion building renovation project at the Fed.
- Amidst general-news of Trump's consideration of replacing Powell, sources suggest that Fed Governor Christopher Waller is a favorite candidate among Trump's advisors, further adding to the ongoing political tension between the White House and the Federal Reserve.
