President Donald Trump, standing alongside Israeli Prime Minister Benjamin Netanyahu at Mar-a-Lago, veered into familiar territory by unleashing a fresh barrage against Federal Reserve Chair Jerome Powell, branding him an “absolute fool” and floating the idea of a “gross incompetence” lawsuit over the central bank’s headquarters renovation.
The remarks came during a joint press conference on December 29, where Trump claimed the project would exceed $4 billion—despite official estimates pegging it at $2.5 billion—and declared he’d “love to fire” Powell, though he might hold off since the chair’s term ends soon.
The president’s frustration with Powell has simmered for months, often tied to interest rate decisions. Yet this time, the trigger was squarely the Fed’s ongoing upgrade of its historic Washington buildings.
Trump described the structures as “small buildings” unworthy of such expense. He insisted gorgeous monuments come cheaper.
He blamed Biden for reappointing Powell in 2022. Conveniently overlooking his own initial nomination in 2018.
The economy, Trump boasted, thrives despite the “fool” at the helm. Third-quarter growth remains robust, even as inflation lingers above the 2% target and job market signals soften.
The Fed recently cut rates by 25 basis points for the third straight meeting, landing at 3.5%-3.75%. A move partly responding to labor weaknesses that Trump has long demanded faster action on.
Powell’s defenders point to challenges like historic preservation, security upgrades, and material costs driving the $2.5 billion tab. The buildings date to the 1930s and hadn’t seen major work since.
Trump countered that the price per square foot sets records. He suggested his own projects deliver more bang for fewer bucks.
He repeated the lawsuit threat with emphasis: “gross incompetence.” A phrase he savored like a catchy slogan.
Netanyahu, fielding questions on Middle East peace, occasionally glanced sideways as the Fed rant unfolded. One wonders if he expected a detour into U.S. construction economics.
Trump plans to name Powell’s successor early next year. Speculation swirls around figures like Kevin Warsh or Kevin Hassett.
Markets barely blinked at the latest salvo. Investors seem inured to the ongoing Trump-Powell saga.
The president has pressured the Fed publicly for quicker rate cuts. Powell has held the line on independence.
This episode highlights the unusual spectacle of a president critiquing his own past appointee. While musing aloud about legal remedies for alleged drywall disasters.
As Powell’s term winds down in 2026, the renovation—meant to modernize aging infrastructure—has become an unlikely battleground. Who knew central banking could involve so much drama over plumbing and marble?
The Fed insists costs reflect necessary upgrades, not extravagance. Trump sees waste on a monumental scale.
In the end, the buildings will stand renovated. Whether the relationship between the White House and the Fed emerges similarly refreshed remains another question.
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