Trump says he might sue Fed Chair Jerome Powell for ‘gross incompetence’

President Donald Trump has escalated his public feud with Federal Reserve Chair Jerome Powell, stating that he is considering legal action against the central banker for what he calls “gross incompetence.” The remarks were made during a news conference in Florida, where Trump also suggested that he plans to replace Powell when his term ends, intensifying a long-standing tension between the White House and the Federal Reserve.

Trump’s criticism centers on the Federal Reserve’s handling of a costly renovation project at its Washington headquarters. He claims the project’s budget and management reflect serious missteps under Powell’s oversight. According to Trump, what should have been a routine modernization effort has become excessively expensive and poorly managed. He characterized the situation as evidence of Powell’s incompetence and suggested that he might pursue legal action, though details on how and when such action might occur remain unclear.

In addition to the renovation project, Trump has voiced frustration with Powell’s broader leadership of the Federal Reserve, particularly regarding monetary policy decisions. He has repeatedly called for lower interest rates and expressed dissatisfaction with what he perceives as a lack of responsiveness to economic conditions. His critique reflects a broader pattern of tension between the executive branch and the central bank, highlighting the challenge of balancing political expectations with the Fed’s independent mandate.

During the news conference, Trump emphasized his desire to fire Powell and indicated that he would announce his choice for a replacement in the coming months. He framed this as a key priority for his economic agenda, underscoring his intent to align the leadership of the Federal Reserve more closely with his policy views. This announcement signals a potential shift in how the White House approaches central bank oversight and its expectations of Fed leadership.

Critics argue that Trump’s rhetoric threatens the independence of the Federal Reserve, which is designed to make decisions on inflation, interest rates, and financial stability free from political pressures. Central banks operate independently to ensure that economic policy is based on data and long-term stability rather than short-term political goals. Threatening the Fed chair with legal action could undermine confidence in the institution and in the broader economy.

Supporters of Trump’s position contend that accountability at the Federal Reserve is appropriate, especially when large expenditures or controversial projects are involved. They argue that Powell’s leadership has not delivered the expected outcomes and that the renovation project’s budget overruns raise valid questions about management and oversight. In this view, the potential for legal scrutiny is a way to ensure responsible governance.

Economists and financial analysts caution that both the Fed’s policy decisions and its management of projects are complex, often involving factors beyond any single individual’s control. They warn that politicizing the Fed’s actions can have unintended consequences for market confidence and economic stability, particularly if investors perceive monetary policy as influenced by political agendas rather than economic realities.

Trump’s renewed criticism of Powell also comes amid ongoing debates over the Federal Reserve’s role in managing the economy, including interest rate policy, inflation, and labor market trends. Some experts argue that the Fed’s cautious approach is intended to balance economic growth with stability, while others believe the central bank could take more aggressive action. Trump’s remarks reflect his preference for quicker, more assertive intervention in economic management.

The legal question of whether a president can sue the Federal Reserve chair is complicated. The Fed operates as an independent agency, and there is uncertainty about whether legal action against its chair for official duties would succeed. Any lawsuit could raise constitutional questions concerning separation of powers, executive authority, and the protections afforded to leaders of independent agencies.

Powell and Federal Reserve officials have largely refrained from engaging publicly with Trump’s attacks. Powell has focused on defending the Fed’s actions and explaining the reasoning behind policy decisions. Analysts note that Powell’s responsibilities require balancing multiple economic indicators and competing priorities, and that isolated criticism often fails to reflect the complexity of the Fed’s work.

Trump’s statements have intensified the debate about the relationship between the White House and independent institutions. While it remains unclear whether he will follow through with a lawsuit, his remarks have already heightened public discussion about the role of the Federal Reserve and the potential consequences of political pressure on monetary policy.

By threatening legal action and signaling a replacement, Trump has renewed attention on the independence of the central bank, the oversight of public projects, and the intersection of politics and economic governance. The unfolding situation highlights the ongoing tensions between political leadership and institutional autonomy, raising questions about accountability, policy direction, and the stability of economic decision-making in the United States.