Trump Threatens Powell Lawsuit, Cites Renovation Costs
Trump Threatens Powell Lawsuit after Dec. 29 remarks on renovation costs, raising political risk for the Fed before Powell's May 2026 term end.
KEY TAKEAWAYS
- Trump had threatened legal action and signaled he may name a replacement in January 2026.
- Federal law allows removal of a Fed chair only for cause and Powell's chair term ends May 2026.
- Renovation estimates diverge: initial $1.9 billion versus nearly $2.5 billion while Trump cited as much as $4.1 billion.
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President Donald Trump said at a Mar-a-Lago press conference on December 29, 2025, that he is considering a lawsuit against Federal Reserve Chair Jerome Powell, citing soaring renovation costs for the Fed headquarters. He also signaled plans to name a replacement in January 2026, raising political risk around Federal Reserve leadership ahead of the chair’s term end.
Political Risk to Federal Reserve Leadership and Renovation Cost Dispute
At the December 29 gathering, Trump accused Powell of incompetence, urged him to resign, and threatened legal action. He indicated he may announce a nominee to replace Powell in January 2026. Powell was appointed chair in 2017 and reappointed in 2021; his chair term expires in May 2026, and his board term runs through January 2028. Federal law limits the president’s ability to remove the Fed chair, who can be dismissed only for cause.
The dispute centers on the Fed headquarters renovation, which covers two buildings near the National Mall. The project’s initial 2019 estimate was $1.9 billion, rising to nearly $2.5 billion in 2025 due to higher prices for wood, steel, and cement, as well as asbestos and lead remediation. Trump has publicly challenged these figures, claiming the total cost exceeds $4 billion, sometimes citing $4.1 billion, and describing it as an exceptionally high cost per square foot. In August 2025, during a tour of the renovations with Powell, Trump cited a $3.1 billion figure.
The renovation project was approved in 2017, and the Federal Reserve has posted a public FAQ addressing questions about costs. Trump’s public accusations and his plan to consider a replacement early in 2026 could extend political scrutiny of Federal Reserve leadership and its projects into the period when the chair’s term and board appointments are decided.
