US President Donald Trump on Tuesday criticised Fed Chair Jerome Powell once again for failing to ease the monetary policy in a timely manner, alleging that the “damage” caused by it is “incalculable”. The 47th US president also threatened to allow a “major lawsuit” against Powell, demanding an immediate reduction in benchmark interest rates. “Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board,” wrote Trump. 

Trump did not elaborate on when that lawsuit could be filed or by whom.

Criticising Powell for the costs involved in the renovation of the Fed headquarters in Washington DC, Trump questioned cost overruns related to construction work at the central bank’s offices while stating that it points to Powell’s “incompetence”. Trump has repeatedly pushed for aggressive rate cuts, while Powell has maintained that the Fed remains committed to deciding on financial indicators.

Jerome ‘Too Late’ Powell must NOW lower rate: Donald Trump 

Trump has often called Powell names, alleging that he has acted “too late” in lowering rates. Trump’s latest salvo against Powell comes as the Fed is undergoing renovations at two of its historic buildings, both built in the 1930s.

In a letter addressed to the Trump 2.0 administration in mid-July, Powell wrote: “While periodic work has been done to keep these buildings occupiable, neither building has seen a comprehensive renovation since they were first constructed… Both buildings were in need of significant structural repairs and other updates to make the buildings safe, healthy, and effective places to work.”

However, the renovation project initially estimated to cost $1.9 billion has now reached $2.5 billion, prompting some Republican lawmakers to call for a probe into the increased spending. Trump has used the opportunity to push for Powell to step down.

$3 billion for a job that should have been done in $50 million: Trump

Trump claimed that the costs going up to $3 billion were unnecessary for “a job that should have been a $50 million fix up”. 

“Not good!” wrote Trump.

Jerome Powell has defended renovation project 

The Fed Chair has already defended the ongoing renovations of both buildings housing the central bank, explaining the reason behind the rise in project costs.

Powell’s current term as Fed Chair ends in May 2026. 

Trump — who nominated Powell to the role during his first term — has already revealed his intent to replace the current Fed chair with a more compliant figure.

However, Powell and several other Fed officials have expressed concern over Trump’s aggressive tariff policy, which they maintain could send inflation soaring going forward.

Trump claims that reducing benchmark rates aggressively will lead to savings of a huge pile of money for the economy.

In July, Powell stated that the Fed would have already reduced key lending rates this year had Trump not introduced his major tariff policy.

Meanwhile, Fed officials have projected two rate cuts in 2025.

Official data released on Tuesday showed inflation in the US rose to 2.7 per cent in July, up 0.2 per cent sequentially, remaining above the Federal Reserve’s 2 per cent target. Typically, the US central bank does not cut rates when inflation is beyond its target range.