Trump Weighs Lawsuit Against the Federal Reserve

President Donald Trump has repeatedly criticized Federal Reserve Chair Jerome Powell for failing to cut interest rates. (Andrew Harnik/Getty Images)

President Donald Trump said Tuesday that he is considering allowing a “major lawsuit” against Federal Reserve Chair Jerome Powell to proceed.

His post on Truth Social indicated that such a suit, which hasn’t been filed, could proceed because of cost overruns on renovations to the Fed’s headquarters in Washington, D.C.

That renovation, a project first approved in 2017, was originally going to cost an estimated at $1.9 billion, but that cost has risen to around $2.5 billion. Trump and Powell toured the site together in late July.

“He’s considering a lawsuit, and I won’t speak on it any further,” press secretary Karoline Leavitt told reporters Tuesday afternoon. “At this moment in time the president is considering a lawsuit against the Fed and I will leave it at that.”

The threat comes after Trump repeatedly criticized the central bank chief and called for his resignation for not lowering interest rates. The Fed held benchmark rates steady at 4.25% to 4.5% at its last meeting on July 30. It is widely expected to lower rates at its next meeting in September, according to CME FedWatch, which monitors 30-day federal funds futures contracts.

Disappointing jobs data over the past few months, combined with slow rising inflation, could pave the way for rate cuts.

Write to Anita Hamilton at anita.hamilton@barrons.com