On Monday, Eastern Time, US President Trump stated that he is considering filing a lawsuit against Federal Reserve Chairman Jerome Powell for "gross negligence." This undoubtedly brings the conflict between the two to the forefront again, but there's nothing new to add—it's simply the Fed's previous overhaul project.
That day, at a press conference with Israeli Prime Minister Benjamin Netanyahu, Trump said, "We are considering filing a lawsuit against Powell, accusing him of poor performance. Think about it, these are not great buildings. These are just small buildings."
"This is a serious dereliction of duty by Powell. And this was a project he orchestrated," Trump said of the construction project. "This guy is just incompetent. There's nothing you can do about it."
It's an open secret that Trump has been targeting Powell this year because the Federal Reserve hasn't cut interest rates as much as he'd hoped. The $2.5 billion renovation of the Fed headquarters is part of this campaign.
As background, the renovation project at the Federal Reserve headquarters was initially approved by the Federal Reserve Board in 2017, with construction beginning in 2021. According to the Federal Reserve's website, the project's initial budget was $1.9 billion, but due to "unforeseen circumstances" requiring more spending, such as "more asbestos than expected, toxic contamination in the soil, and higher-than-expected groundwater levels," the budget has now ballooned to $2.5 billion (approximately RMB 17.9 billion).
Previously, Russell Vought, director of the White House Office of Management and Budget, wrote to Powell stating that Trump was "very uneasy" about Powell's performance at the Federal Reserve, saying that he "had not attempted to correct the Fed's fiscal policy" and instead "undertook an extravagant renovation of the headquarters building in Washington, D.C." Trump had previously warned that the $2.5 billion "renovation plan" could be sufficient grounds for firing Powell.
In his reply, Powell stated that the Federal Reserve headquarters and its affiliated buildings had serious structural aging problems, requiring the replacement of materials containing asbestos and lead, and a complete overhaul of the electrical, heating, and fire protection systems. He also noted that the project had undergone design modifications to reduce costs and avoid delays, and did not involve major changes, therefore it was not resubmitted for review.
In fact, Trump has repeatedly criticized Powell in public and even threatened to fire him. In a recent interview on Monday, Trump reiterated this idea: "He should resign. It would be a good thing for the country. I would fire him. I really want to fire him. But you know, we're too close. But maybe I'll still consider it."
He added, "Powell's term is actually coming to an end." Indeed, with Powell's term as Federal Reserve Chairman ending on May 15, 2026, the Fed will face its first leadership change in eight years next year regardless.
As for his successor, Trump said his preferred candidate for Federal Reserve Chair has "not changed" and he expects to announce the new Fed Chair in January.
(Article source: CLS)
