Fed Rate-Cut Pressure Mounts as Trump Threatens Legal War Against Powell

Washington's financial circus hits peak drama as the Fed faces unprecedented political heat.

Trump vs. Powell: The legal showdown nobody wanted—but Wall Street can't look away from.

Rate-cut demands reach fever pitch while former presidents turn monetary policy into a battleground. Because nothing says 'stable economy' like subpoenas and Twitter tirades.

Bankers brace for impact as political interference reaches ATH—just another Tuesday in 2025's financial clown world.

TLDR

• Donald Trump said he is considering a lawsuit against Jerome Powell over Federal Reserve renovation costs.
• Trump claimed the renovation project cost $3 billion when it should have been a $50 repair.
• He accused Powell of gross incompetence and noted a criminal referral to the DOJ for alleged perjury.
• July CPI data showed a 2.7% yearly increase, which was lower than expected.
• Trump said tariffs have not caused inflation and that consumers are not paying them.

U.S. President Donald TRUMP signaled possible legal action against Federal Reserve Chair Jerome Powell over costly renovation projects. He also renewed pressure on the central bank to implement a Fed rate-cut following the release of July CPI data. Trump criticized Powell’s performance, calling him “grossly incompetent” in overseeing the renovations and monetary policy decisions.

Trump Criticizes Renovation Costs and Powell’s Leadership

Trump stated he is considering allowing a major lawsuit against Powell regarding $3 billion in Federal Reserve renovation costs. He claimed the work “should have been a $50 fix-up” and accused Powell of mismanaging the project. Trump said Powell had been criminally referred to the DOJ for alleged perjury linked to the renovation.

The president visited the Federal Reserve last month to inspect the renovations and again urged a Fed rate-cut. He said Powell’s delay in adjusting rates had caused “incalculable” economic harm. Trump stressed that the U.S. economy’s strength had “blown through Powell and the complacent Fed Board.”

Powell has maintained that the Fed should wait to see the impact of tariffs on inflation before making a decision. Trump disagreed, insisting that tariffs have not driven prices higher. He emphasized that massive inflows of cash are benefiting the economy without burdening consumers.

CPI Data Strengthens Trump’s Call for Fed Rate-Cut

July CPI data showed a 2.7% year-over-year increase, below the expected 2.8%, while monthly CPI fell to 0.2% from 0.3%. Trump argued that the figures proved tariffs were not raising inflation and justified a Fed rate-cut. He reiterated that consumers are “not even paying the tariffs” as cash flows into the U.S.

Stephen Miran, Trump’s nominee for the Fed Board, supported this assessment in a CNBC interview. He said inflation was “well behaved” and showed no evidence of tariff-related increases. Miran noted that CPI inflation has averaged 1.9% annually since Trump took office.

Miran also stated that the CPI data was consistent with the July jobs report and unlikely to be revised. He claimed there was “no evidence whatsoever” of tariff-induced inflation at the aggregate level. Trump used the data to reinforce his demand for an immediate Fed rate-cut.

Trump has intensified calls for a Fed rate cut, citing strong economic growth and subdued inflation trends. He said the central bank’s delay in action could undermine gains. Powell continues to face political and public scrutiny over monetary policy and renovation expenses.