President Donald Trump is considering a lawsuit against the Federal Reserve as he continues to bash Fed Chair Jerome Powell’s management of interest rates.
“At this moment in time the president is considering a lawsuit against the Fed,” White House Press Secretary Karoline Leavitt said Aug. 12 without providing additional details.
A lawsuit would escalate Trump’s ongoing campaign against Powell, who Trump has pressured to lower interest rates in an effort to stimulate the economy. Trump mentioned “allowing a major lawsuit against Powell to proceed” in a social media post earlier in the day, pointing to the $2.5 billion cost of renovating the agency’s Washington DC headquarters.
Trump clashed with Powell − who Trump appointed in 2017 − in person last month during a tour of the Fed’s building renovation, with the chairman correcting the president over the scale of cost overruns.
In general, the Fed cuts interest rates to stimulate a flagging economy and job market. It increases interest rates – or keeps them higher for longer – to lower inflation or prevent a spike in prices. Rising prices due to Trump’s tariffs on imported goods have made the board more wary of cutting interests and potentially increasing inflation.
Powell warned in April about the impact of Trump’s tariffs on inflation, telling the Economic Club of Chicago that “Unemployment is likely to go up as the economy slows, in all likelihood, and inflation is likely to go up as tariffs find their way and some part of those tariffs come to be paid by the public.”
Contributing: Joey Garrison
This article originally appeared on USA TODAY: Donald Trump slams Federal Reserve Chair Jerome Powell, weighs lawsuit
