Trump Slams Powell Over Fed Headquarters Costs
President Donald Trump has escalated his long-running feud with Federal Reserve Chair Jerome Powell, announcing plans for a “major lawsuit” over what he calls runaway spending on the renovation of the Fed’s headquarters in Washington. In a Truth Social post on Tuesday, Trump claimed a project that should have cost $50 million has ballooned into a $3 billion construction debacle. He labeled Powell “Too Late,” accusing him of causing “incalculable” damage.
Linking Lawsuit Threat to Rate Cut Demands
The lawsuit threat is tightly tied to Trump’s push for aggressive interest rate cuts. “Jerome ‘Too Late’ Powell must NOW lower the rate,” Trump posted, insisting that deep cuts would save the U.S. money and help with upcoming debt obligations. Despite multiple cuts in 2024 under Joe Biden, the Fed has held rates steady in 2025, resisting Trump’s pressure.
In July testimony to Congress, Powell said the Fed might have already eased policy if not for Trump’s tariff policies, which he argued are shaping economic conditions. Trump’s dissatisfaction boiled over during a visit to the Fed’s construction site last month, where he told Powell the renovation had hit $3.1 billion. Powell pushed back immediately: “I haven’t heard that from anybody.”
Fed Defends Project as Preservation Necessity
The Federal Reserve has defended the massive renovation, citing the need to modernize and preserve historic buildings. Officials point to construction challenges and preservation rules as the reasons costs have risen. Trump, however, continues to brand it as government waste, writing on Truth Social that the project’s handling was “horrible” and “grossly incompetent,” adding the price tag is “not good” for what he believes should have been a much smaller job.
Shortlist for Powell’s Replacement Expands
Behind the scenes, the Trump administration is compiling a shortlist to replace Powell when his term ends next year. Names reportedly under consideration include Fed Vice Chairs Philip Jefferson and Michelle Bowman, Dallas Fed President Lorie Logan, former St. Louis Fed President Jim Bullard, and macroeconomic consultant Marc Sumerlin.
This adds to an earlier list featuring National Economic Council Director Kevin Hassett, former Fed board member Kevin Warsh, and current board member Christopher Waller. Sources told Politico the president is considering both internal Fed figures and private-sector outsiders, aiming for someone who can meet his demands while maintaining market stability.
The Next Fed Chair’s Challenge
Whoever takes over will inherit a powerful institution with thousands of employees, responsible for setting interest rates, regulating banks, and overseeing the U.S. payments system. They will also face Trump’s insistence on rapid rate cuts while balancing the Fed’s credibility in managing inflation. As one policy insider put it, achieving both “without becoming political” will be nearly impossible.
