Topline
President Donald Trump said he’s looking at a “major lawsuit” against Federal Reserve Chair Jerome Powell over the agency’s over-budget remodel of its Washington headquarters, which has become a prominent attack line for Trump and his allies against Powell.
Federal Reserve Chairman Jerome Powell conducts a news conference after a meeting of the Federal Open Market Committee on Wednesday, July 30, 2025. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
CQ-Roll Call, Inc via Getty Images
Key Facts
Trump said he is “considering allowing a major lawsuit against Powell to proceed” over what he called “the horrible, and grossly incompetent, [sic] job he has done managing the construction of the Fed Buildings,” he wrote Tuesday on Truth Social.
Trump repeated his preferred attack lines against Powell, referring to him as “too late” while pressuring him to lower the interest rate.
The Federal Reserve renovations have become the latest target for Trump and his allies amid Trump’s ongoing feud with Powell, who he has repeatedly urged to resign and threatened to terminate, though it’s unclear if he has the legal authority to do so.
Trump in July called for a probe into the renovations at the Federal Reserve, a project that has run about $600 billion higher than its initial estimate, according to the Fed.
Trump and Powell openly bickered about the renovations when Trump visited the construction site for a tour led by Powell last month, with Trump claiming the project was estimated to cost $3.1 billion, and Powell quickly correcting him, telling the president his figure also included the cost of renovations to another Fed building.
Trump alleged in his Truth Social post on Tuesday the renovations will cost $3 billion “for a job that should have been a $50 Million Dollar fix up.”
Tangent
Trump blamed his former treasury secretary from his first term, Steven Mnuchin, for having “pushed this loser,” referring to Powell, who he accused of causing “incalculable” damage. While Trump has suggested he might try to fire Powell and has even reportedly showed some Republican lawmakers a draft termination letter, he’s also said publicly it’s unlikely he would go through with ousting him before his term expires next year. Removing Powell could be a tricky legal maneuver as the Federal Reserve Act of 1913 only allows the chair to be ousted for “cause.”
What To Watch For
A search for Powell’s replacement is underway, Treasury Secretary Scott Bessent told Bloomberg in an interview last month, suggesting Powell could step down from the board when his term as chair ends next year. His term as a Fed governor expires in January 2028. Bessent said the Trump administration has already started a “formal process” to find the next Fed chair.
Key Background
It’s unclear what potential lawsuit Trump might be referring to. The federal reserve has provided various reasons for the increase in cost of renovations to the central bank, including changes to the original building design and differences in estimates and actual costs of materials, equipment and labor. The project, originally approved by the Federal Reserve Board in 2017 and started in 2021, includes renovations to two Fed buildings: the Mariner S. Eccles Building and 1951 Constitution Avenue, which the Fed says have not been renovated since the 1930s, according to a fact sheet on the Federal Reserve website. The Fed has also rejected claims from some Republicans that the renovations include luxury amenities, such as a new VIP dinging room, VIP elevator or new water features.
Further Reading
White House Latest Attack On Jerome Powell: Claims Federal Reserve Renovations Are ‘Ostentatious’ (Forbes)
Trump Denies He Has Plans To Fire Powell—Blames Biden For Giving Fed Chair Second Term (Forbes)
Who Will Be Trump’s New Fed Chair? Search Has Reportedly Begun—Here Are The Likely Candidates (Forbes)
Source: https://www.forbes.com/sites/saradorn/2025/08/12/trump-might-greenlight-major-lawsuit-against-fed-chair-jerome-powell/