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President Donald Trump on Tuesday intensified his criticism of Federal Reserve Chair Jerome Powell, threatening to allow a “major lawsuit” over the Fed’s Washington, D.C. renovation projects. Trump’s post on Truth Social also called for urgent cuts to interest rates, renewing his long-standing pressure on the central bank to lower borrowing costs.

Lawsuit Threat Over Fed Renovations
Trump’s post centered on what he described as exorbitant renovation expenses at the Fed’s historic headquarters. “Three billion dollars for a job that should have been a $50 million fix-up. Not good!” he wrote. While he did not provide details on who would file the lawsuit or the timeline, the move signals continued scrutiny of Fed spending under Powell’s leadership.

White House press secretary Karoline Leavitt declined to elaborate, stating, “He’s considering a lawsuit, and I won’t speak on it any further. I will allow the president to do that.” The Fed also declined to comment on the post.

Powell and Fed Response
Powell has previously defended the cost of renovations at two historic Fed buildings, citing the complexity of the projects and the need to preserve essential infrastructure. During a site visit last month, Powell reportedly pushed back on Trump’s criticism, stating, “I haven’t heard that from anybody,” in response to claims that the projects had surpassed $3.1 billion.

Interest Rate Pressure
Trump’s critique extends beyond construction costs to the Federal Reserve’s monetary policy. He has repeatedly called on Powell to slash interest rates by multiple percentage points, arguing that doing so would reduce borrowing costs for the U.S. government and stimulate the economy.

Since raising the benchmark federal funds rate in 2022, the Fed gradually cut rates multiple times in 2024, but rates have remained steady through 2025, defying Trump’s demands. In congressional testimony in July, Powell noted that prior tariff policies by Trump had influenced the Fed’s decision-making on rate reductions.

Market Implications
Fed officials in June indicated expectations for two rate cuts this year. Traders are currently anticipating a quarter-point reduction following the Federal Open Market Committee’s September meeting, with further cuts possible after October and December sessions.

Trump’s statements add another layer of uncertainty for markets, emphasizing tensions between political pressure and central bank independence as the economy navigates borrowing costs, inflation, and ongoing fiscal debates.

With interest rates holding steady and renovation costs under scrutiny, the clash between Trump and Powell underscores the broader debate over economic management, federal spending, and monetary policy. As discussions around potential lawsuits and policy changes continue, businesses and investors remain attentive to the evolving financial landscape.