Trump Threatens Lawsuit Against Fed Chair Powell Over $3.1 Billion Renovation Delays

U.S. President Donald Trump is reportedly considering legal action against Federal Reserve Chair Jerome Powell, according to multiple statements from the White House and press briefings. The potential lawsuit appears to stem from Trump’s criticisms of Powell’s leadership and his management of a high-profile, multi-billion-dollar renovation of the Fed’s headquarters in Washington, D.C. White House Press Secretary Karoline Leavitt first mentioned the possibility of litigation during a press briefing on July 11, stating that Trump was “weighing a possible lawsuit” against Powell [2]. Trump has since escalated the rhetoric, publicly threatening to allow the lawsuit to proceed, describing Powell as a “loser” and accusing him of incompetence in overseeing the renovation project [6][8].

The controversy centers around a $2.5–$3.1 billion renovation of the Federal Reserve’s headquarters, which has faced significant cost overruns and delays. The White House has raised questions about whether Powell violated federal procurement rules or mismanaged funds [1][2][4]. The Federal Reserve has responded by posting a detailed explanation of the increased costs and has commissioned an internal review by the central bank’s inspector general [6]. During a recent visit to the Fed’s headquarters, Trump reiterated his concerns about the renovation’s cost and expressed frustration with Powell’s decision-making, despite their cordial July meeting to review the project [6][9].

In addition to the renovation issue, Trump has publicly criticized Powell for what he perceives as delays in cutting interest rates. Trump has blamed these delays for economic stagnation and sluggish growth, while Powell has attributed the lack of rate cuts to the uncertainty caused by Trump’s tariff policies [5][8]. This disagreement highlights the growing tension between the executive branch and the independent Federal Reserve. While the Fed is designed to operate without direct political interference, Trump’s public statements and legal posturing suggest a challenge to that independence, particularly in the context of economic policy and regulatory oversight [6][8].

The potential lawsuit underscores the deepening conflict between the Trump administration and the Federal Reserve. Although the legal threats remain vague, with no details provided on who might bring the suit or on what grounds, the rhetoric has intensified political pressure on the Fed [1][6]. The situation also reflects broader frustrations within the administration over the Fed’s response to Trump’s economic policies. The outcome of this unfolding situation remains uncertain. While the Fed has taken steps to address concerns about the renovation project, the political pressure from the White House appears unlikely to subside in the near term [6][9].

Source: [1] Trump threatens 'Too Late' Powell again, threatens lawsuit over Feds' $3b HQ renovations (https://www.foxnews.com/politics/trump-blasts-too-late-powell-again-threatens-lawsuit-over-feds-3b-hq-renovations)

[2] Trump considering a lawsuit against the Fed's Powell (https://abcnews.go.com/Politics/live-updates/trump-admin-live-updates/?id=124535213)

[3] Trump says he's 'considering allowing a major lawsuit against Powell to proceed' (https://www.cnn.com/2025/08/12/economy/trump-lawsuit-fed-chair-powell)

[4] Trump weighing lawsuit against Fed's Powell over renovations (https://www.reuters.com/legal/litigation/trump-weighing-lawsuit-against-feds-powell-over-renovations-white-house-says-2025-08-12/)

[6] Trump threatens lawsuit against Fed Chairman Powell (https://thehill.com/business/5448121-trump-threatens-lawsuit-powell/)

[7] Trump threatens Fed chair Powell with 'major lawsuit' over building renovations (https://www.cnbc.com/2025/08/12/trump-fed-powell-lawsuit-washington-building.html)

[8] Trump considering lawsuit against Fed as he bashes Chair Powell (https://www.usatoday.com/story/news/politics/2025/08/12/donald-trump-jerome-powell-federal-reserve-lawsuit-chair/85628552007/)

[9] Trump weighing lawsuit against Fed's Powell over renovations (https://ca.news.yahoo.com/trump-weighing-lawsuit-against-feds-181119387.html)