Trump Renews Push for Rate Cuts, Threatens Powell with Lawsuit
U.S. President Donald Trump once again urged the Federal Reserve to cut interest rates immediately, using a Truth Social post on Tuesday to renew his criticism of Fed Chair Jerome Powell.
Sharp Criticism of Powell and Fed Spending
In his post, Trump referred to Powell as “Too Late,” accusing him of causing “incalculable” damage by consistently lagging behind on monetary policy decisions.
Trump also said he was “considering allowing a major lawsuit against Powell to proceed” over what he described as mismanagement of Federal Reserve building renovation projects. According to Trump, the Fed spent $3 billion on work that should have cost only $50 million.
Mnuchin Also Targeted
The president criticized former Treasury Secretary Steven Mnuchin, whom he mockingly referred to as “Steve Manouychin,” suggesting Mnuchin had recommended Powell for the Fed chair role.
Despite his attacks on Fed leadership, Trump claimed the U.S. economy is performing strongly, saying it has “blown through Powell and the complacent Board.”
Analyst: Lawsuit Unlikely to Sway Policy
Jaret Seiberg of TD Cowen said Trump’s threat to sue Powell over the Fed headquarters renovations is unlikely to influence monetary policy. He suggested such a move might even make Powell more resistant to cutting rates, as doing so could appear to yield to political pressure.
Seiberg noted the situation benefits Trump politically, allowing him to blame Powell for any economic slowdown while still benefiting from the Fed’s efforts to lower inflation. He added that removing Powell would likely be more damaging to Trump than keeping him in place.
New Fed Nomination Seen as Routine
Seiberg also addressed Trump’s nomination of Stephen Miran, Chair of the Council of Economic Advisers, to the Fed. He said the move is routine and poses little risk of politicizing monetary policy.
Miran’s support for expanding voting rights to all Fed Bank presidents could encourage broader debate. However, as only one vote among many, he is unlikely to shift the Federal Open Market Committee’s core focus on price stability and maximum employment.
