President Donald Trump escalated his long-running feud with Federal Reserve Chair Jerome Powell on Monday, saying he is considering a lawsuit for what he called “gross incompetence” tied to a multibillion-dollar renovation of the Fed’s headquarters in Washington, DC.
Speaking alongside Israeli Prime Minister Benjamin Netanyahu, Trump accused Powell of overseeing a project that has spiraled wildly over budget. He claimed the renovation near the National Mall could end up costing more than $4 billion, calling it the most expensive construction per square foot in the world.
“This is Powell’s baby,” Trump said. “And the guy is just incompetent. Very incompetent.”
Dispute Over the True Cost
Trump alleged the project is roughly $1.5 billion over budget, framing it as evidence of mismanagement. The Federal Reserve pushed back, pointing to its latest budget documents, which place the total cost of the renovation at about $2.5 billion.
Powell has previously defended the spending, noting that the project involves the restoration of two historic buildings on the National Mall that date back to the 1930s. In a July letter to White House budget director Russ Vought, Powell described the scope as unusually large because of the age, size, and security requirements of the facilities.
Earlier this year, Trump toured the construction site wearing a hard hat and criticized what he described as a “very luxurious project.” At the time, he stopped short of calling for Powell’s removal, tying his restraint to one condition: faster interest rate cuts.
Rates, Renovations, and Renewed Pressure
Interest rates remain at the center of Trump’s frustration. The Federal Reserve cut rates three times this year — in September, October, and December — lowering the benchmark rate to a range of 3.5% to 3.75%. Trump has repeatedly argued those cuts came too slowly and too late.
On Monday, he again floated the idea of firing Powell, though he acknowledged the Fed chair’s term ends in May 2026. Trump also criticized former President Joe Biden for reappointing Powell in 2021.
To underscore his argument, Trump compared the Fed project to a new White House ballroom he has championed, claiming his own construction is under budget and ahead of schedule despite being a “massive job.”
An Unprecedented Legal Threat
Legal experts note that a lawsuit by a sitting president against the chair of the Federal Reserve would be extraordinary and potentially unprecedented. Trump did not specify what legal grounds such a case would rest on, leaving open questions about whether the threat is political pressure or a serious legal move.
Still, the remarks signal an intensifying clash between the White House and the central bank — one that blends policy disagreements over interest rates with personal attacks and now, the possibility of court action.
As Trump ramps up pressure on the Fed, the standoff with Powell appears far from over, even as the chairman’s term nears its final stretch.
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