President Donald Trump renewed his one-sided feud with Federal Reserve Chairman Jerome Powell this week, saying he may try to fire the central banker or bring a “gross incompetence” lawsuit against him for his alleged mismanagement of a costly office renovation project.
Speaking at a joint press conference at his Mar-a-Lago resort with Israeli Prime Minister Benjamin Netanyahu, Trump launched into a diatribe against Powell, whom the president has persistently prodded to lower benchmark borrowing rates.
Calling Powell an “absolute fool,” Trump claimed an ongoing renovation of the Fed’s headquarters in Washington, D.C., has the “highest price in the history of construction” on a per-square-foot basis.
Trump then accused Powell of gross incompetence, saying the administration is “going to probably bring a lawsuit against him.”
As the president was walking offstage, a reporter shouted a question about whether Trump will ask Powell to resign before his term as Fed chair expires in May.
“I’d love to fire him,” Trump responded. “We’re so close [to the end of his term], you know, but maybe I still might.”
A Federal Reserve spokesperson declined to comment Tuesday in an email to Scotsman Guide.
The Fed renovation project was originally budgeted at $1.9 billion in 2019. But the estimated cost swelled to $2.5 billion as the project proceeded, which the Fed attributed to design changes mandated by review agencies; the rising costs of materials, equipment and labor; and unforeseen construction conditions, such as contaminated soil and more asbestos remediation than anticipated.
Over the summer, Trump and other administration officials used the cost overruns as ammunition against Powell. White House adviser Kevin Hassett said during an ABC interview in July that the matter of whether the president has the legal authority to fire Powell was “being looked into.”
Previously, Trump had threatened to fire Powell over the central bank’s delay in cutting interest rates. The Fed has since slashed rates by a total of 75 basis points at its September, October and December policy meetings, bringing the benchmark federal funds rate to a target range of 3.5% to 3.75%.
But that hasn’t been enough to satisfy Trump, who has argued rates should be set somewhere between 0.25% and 1.75%.
Earlier this month, Trump wrote in a social media post that anybody who disagrees with his interest rate views “will never be the Fed Chairman!”
Though Hassett initially indicated he wasn’t interested in succeeding Powell as Fed chair, he has since emerged as the front-runner. He currently holds 45% odds to claim the top central banking role, with former Fed Governor Kevin Warsh second at 34%, according to the online prediction market Kalshi.
Asked at this week’s Mar-a-Lago press conference about when he will announce his Fed chair decision, Trump replied, “January sometime.”
