Trump Again Slams Powell, Hints at Legal Action

TradingKey - On Tuesday (U.S. Eastern Time), the U.S. released its July CPI data: headline inflation rose 2.7% year-over-year, slightly below expectations, while core CPI climbed to 3.1%. The mixed report reinforced market bets on a September rate cut. Shortly after the data release, former President Donald Trump once again lashed out at Federal Reserve Chair Jerome Powell.

Click to view TradingKey analysts' comments on the US CPI : Comments on the US July CPI: With the obstacles cleared, where will the US stock market go?

Trump criticized the Fed’s headquarters renovation project — which he claimed ballooned from an initial $50 million budget to $3 billion — calling Powell “terrible, absolutely incompetent” in managing the project. He accused Powell of mismanagement and waste, using the renovation costs as a central argument in his broader campaign to pressure the central bank.

The Fed’s renovation has long been a flashpoint in Trump’s attacks on Powell. After the Fed held rates steady in July, Trump’s criticism intensified. Earlier this month, following weaker-than-expected employment data, he fired the Commissioner of the Bureau of Labor Statistics — a position filled during the Biden administration — signaling growing frustration with economic data that could delay rate cuts.

Trump claimed that former Treasury Secretary Steven Mnuchin’s recommendation of Powell was “a gift” that delivered a “perpetually late” leader whose policies have caused immeasurable damage to the economy. He reiterated his demand that Powell “cut rates immediately.”

Trump believes Powell’s high-interest-rate policy is stifling economic growth. While he has previously considered firing Powell before his term ends, he has opted instead to wait until Powell’s current term expires in May 2026, citing concerns over market stability and procedural legality.

According to informed officials, Treasury Secretary Scott Bessent is currently vetting potential successors, with a shortlist expected to be finalized by fall. Last week, Trump nominated his chief economic advisor, Stephen Miran, to fill the Fed governor seat left vacant by Adriana Kugler — whose term ends in January 2026 (she officially steps down August 8). The move buys the administration time to identify a long-term candidate while maintaining influence on the Fed’s direction.

Trump’s renewed attacks — including the suggestion of possible legal or procedural action over the renovation — reflect an escalating effort to undermine Powell’s credibility and shape the future leadership of the Federal Reserve.