President Donald Trump escalated his long-standing feud against Federal Reserve Chair Jerome Powell, threatening legal action against the latter, and sparking fresh concerns regarding the central bank’s independence.
Trump Threatens Lawsuit Over ‘Gross Incompetence’
Speaking at a news conference in Mar-a-Lago on Monday, alongside Israeli Prime Minister Benjamin Netanyahu, Trump accused Powell of “gross incompetence,” while threatening a “major lawsuit” against him, just months before his term is set to end in May 2026.
“We’re going to probably bring a lawsuit against him,” Trump said, without actually mentioning any specific grounds for the same, or when such a lawsuit might be filed, according to a report by The Washington Post.
Trump’s remarks were centered around the Federal Reserve’s multi-billion-dollar headquarters renovation project, which has become the focal point of his criticism over the past year.
The project undertaken under Powell’s leadership has seen costs swell to over $3.1 billion, up from a pre-pandemic estimate of $1.9 billion. According to the Federal Reserve, this reflects higher costs for materials such as steel and cement following the pandemic.
Powell, however, has disputed this claim, noting that Trump had factored in another government building that was constructed five years prior.
When asked by reporters if he would fire Powell, with just five short months left in his term, Trump said, “Maybe I still might,” according to a report by CNBC TV18.
Neither the White House nor the Federal Reserve immediately responded to Benzinga’s request for a comment. This story will be updated as soon as we hear back.
Criticism Centered Around Rate Cuts
Trump’s criticism of Powell throughout this past year has centered around the Fed Chair’s refusal to cut interest rates more aggressively.
This comes amid warnings from critics that such overt political pressure on the central bank stands to erode its credibility in global markets.
Trump, who appointed Powell himself during his first term, said during the news conference that he will be announcing his next pick to lead the Federal Reserve in January.
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