Trump Threatens Legal Action Against Federal Reserve Chair Powell Over HQ Renovation Costs

White House vs. Fed: A Strained Relationship

U.S. President Donald Trump is considering legal action against Federal Reserve Chair Jerome Powell due to delays and cost overruns in the renovation of the Fed's headquarters in Washington, D.C. The White House has accused Powell of mismanagement, leading to tensions over economic policies, particularly concerning rate cuts amid tariff-driven uncertainty. This potential lawsuit highlights the strained relations between the executive branch and the central bank, challenging the Fed's political independence.

Renovation Controversy and Response

The controversy surrounding the $2.5–$3.1 billion renovation project at the Federal Reserve's headquarters has raised questions about Powell's leadership. The White House has questioned whether Powell violated federal procurement rules or mismanaged funds. In response, the Federal Reserve has defended the costs, citing an internal review by the central bank's inspector general. Despite a cordial meeting between Trump and Powell to review the project, concerns persist about the renovation's cost and Powell's decision-making.

Economic Policy Disagreements and Political Pressure

In addition to the renovation issue, Trump has criticized Powell for delays in cutting interest rates, attributing economic stagnation to these delays. Powell, on the other hand, has pointed to the uncertainty caused by Trump's tariff policies. This disagreement underscores the growing tension between the executive branch and the independent Federal Reserve. The potential lawsuit adds to the conflict, intensifying political pressure on the Fed and raising questions about the central bank's autonomy in economic policy decisions.