Trump threatens to sue ‘loser’ Jerome Powell — as SF Fed chief says interest rates finally may fall
WASHINGTON — President Trump unveiled his latest line of attack Tuesday against “loser” Federal Reserve Chairman Jerome Powell — as the chief of the Fed’s San Francisco division told The Post interest-rate cuts finally could be on the horizon.
“Jerome ‘Too Late’ Powell must NOW lower the rate. Steve ‘Manouychin’ really gave me a ‘beauty’ when he pushed this loser,” Trump wrote on social media, deliberately misspelling the name of his first-term treasury secretary, Steven Mnuchin, who encouraged him to pick Powell in 2017.
“The damage he has done by always being Too Late is incalculable. Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board. I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings.”
He added that the $2.5 billion headquarters renovation project “should have been a $50 Million Dollar fix up.”
It’s unclear what Trump’s lawsuit claims might be. Powell’s press office did not offer comment and White House press secretary Karoline Leavitt declined to elaborate at a briefing.
The president slammed Powell shortly after the monthly release of inflation data for July, with the Consumer Price Index showing a 2.7% annual increase in prices — remaining above the Fed’s 2% target but well below a 9.1% peak under former President Joe Biden in June 2022.
‘Two Rate Cuts Seem Appropriate’
Mary Daly, president of the Federal Reserve Bank of San Francisco, said in an interview that the inflation data offer optimism about a rate cut at the next decision-making meeting scheduled for Sept. 16.
“Last December, I said I thought two rate cuts would be appropriate this year [in 2025]. In March, I thought two rate cuts would be appropriate. In June, I thought two rate cuts would be appropriate. And today, I think two rate cuts seem appropriate,” Daly said.
“It’s possible that two will be too little, and we’ll do three and that’s possible if the labor market falters or inflation starts coming down faster than it has been. It’s also possible that the inflation data in the future will come in hotter, and we will have to rethink this. And then maybe one would be appropriate. But I think two is a very good starting point for the fall.”
Powell-led review panels have refused to lower interest rates at all thus far in 2025 — with Trump alleging political motivations after three cuts last year, including two reductions shortly before the presidential election. During that race, Vice President Kamala Harris faced criticism for her role in the incumbent administration’s economic program.
Powell has justified the unchanged rates by citing the unknown effect of Trump’s tariffs on inflation.
Daly told The Post, however, that she worries about “waiting too long.”
“To wait until we have perfect clarity would be a mistake,” she said, adding that the central bank’s decision-makers initially were uncertain about the economic impact of Trump’s agenda, such as the impacts of immigration policy, deregulation and tax cuts.
Tariffs are likely to have a one-time effect on inflation, Daly said, which would mean that the worst inflationary pain could be over soon after Trump pulled the trigger on his sweeping “reciprocal” tariffs, which took effect on Aug. 7, after previously imposing in April a new 10% baseline on most countries.
Trump also has applied 50% tariffs on aluminum, copper and steel and 25% tariffs on foreign-made cars, though many of the top vehicle exporters negotiated lower rates.
Consumer Price Index inflation data for August are expected to be released on Sept. 11 just ahead of the rate-cut decision.
“If that effect is a one-off, it’s a one-time effect, then we shouldn’t see inflation continue to drift up — so that’s been my view,” said Daly, who was appointed in 2018 to her role by board members of the San Francisco Fed.
“You net those things out, and I think it’s less clear that the long-run impact of these tariffs will be something that pushes inflation up or constrains the labor market,” she went on.
“Then we could look at … just what is going on in the economy more generally. And there we see the restrictive policy, higher interest rates, has been putting downward pressure on inflation for some time and slowing the labor market. And at some point you have to let go of the reins a bit so that the economy continues to expand while we continue to have just enough pressure on inflation to bring it fully down to 2%.”
High interest rates have made it more expensive to finance home purchases and for businesses and consumers to take out loans, including to lease cars and reduce credit-card balances.
Trump and his team recently appeared to back away from allegations that Powell may have broken the law over the government building renovations, which could have provided a potential justification for termination.
Congressional Republicans had suggested that Powell lied to a Senate committee — a crime punishable by five years in prison — by testifying that the building lacked various luxury features, insisting that plans had changed.
Trump’s budget chief, Russ Vought, then wrote to Powell last month pointing out an apparent Catch-22: that he may have violated the National Capital Planning Act by making unapproved changes to plans.
Powell replied that he considered the changes minor enough that disclosure was not required.
Trump, a billionaire real-estate developer, said he had no plans to fire Powell after touring the site on July 24 — attributing cost overruns to wasteful decisions including to retroactively build basements and parking spots beneath historic buildings just north of the National Mall.
Trump has said he wants Powell to resign but that if he won’t do so, he plans to empower a replacement when his term expires in May 2026 who will immediately move to lower interest rates by more than 2%.