Trump threatens ‘major lawsuit' against Federal Reserve Chief Jerome Powell
The threat, issued on Tuesday in a post on Truth Social, is the latest salvo in Trump's ongoing pressure campaign against the central bank leader.
The two have clashed over interest rates: Trump has pushed for aggressive cuts, while Powell has maintained the bank will make a decision based on financial indicators, not political pressure.
'Jerome 'Too Late' Powell must NOW lower the rate,' Trump wrote in Tuesday's message. '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.'
The president's attacks on Powell have become a source of concern for economic observers, who worry that Trump is attempting to undermine the independence of the central bank and bring it into closer alignment with his political priorities.
Trump has latched onto cost overruns stemming from construction work at the bank's headquarters in Washington, DC, which he said points to Powell's 'incompetence'.
The Federal Reserve is currently undergoing renovations on two of its historic buildings, both built in the 1930s, including asbestos removal, major structural work to meet modern safety standards, and the replacement of antiquated systems for ventilation, plumbing, electricity and fire detection.
'While periodic work has been done to keep these buildings occupiable, neither building has seen a comprehensive renovation since they were first constructed,' Powell wrote in a letter to the Trump administration on July 17.
'Both buildings were in need of significant structural repairs and other updates to make the buildings safe, healthy, and effective places to work.'
But while the renovation project was initially estimated to cost $1.9bn, that number has increased to around $2.5bn as construction proceeds. Some Republican lawmakers have said they may open an investigation into the increased projected cost, and Trump has used the renovation to push for Powell to step down.
Trump has also pushed strongly for a decrease in rates, dubbing Powell by the nickname 'Too Late' for his supposed delays in cutting rates.
Powell's term as Federal Reserve chair ends in May 2026. Trump, who nominated Powell to the role during his first term, has already suggested he is considering replacing the outgoing chair with a more compliant figure.
'The damage he has done by always being Too Late is incalculable,' Trump said on Tuesday. 'Fortunately, the economy is sooo good that we've blown through Powell and the complacent Board.'
Powell and economic policymakers at the Federal Reserve, meanwhile, have expressed concern over Trump's aggressive tariff policy, which they maintain could increase inflation in the coming months.
Data released by the US Labor Department on Tuesday said that consumer inflation had risen 2.7 percent for the 12-month period ending in July. That number was an increase of 0.2 percent over June.
The Federal Reserve aims to keep inflation below 2 percent and does not typically lower interest rates when inflation is above that figure.
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United States President Donald Trump's erratic approach to tariffs, putting some in place and then taking them away, has made it difficult for businesses to plan. In April, car companies, including Stellantis, Ford and Volvo, suspended financial guidance as a result of the uncertainty. Last month Volvo also said that tariffs will cost it $1.2bn in the second quarter. Ford then announced it expects a reduced annual profits to $3bn after taking an $800m hit from tariffs in the second quarter. GM announced that it expects a $5bn hit, and Toyota said it expects $9.5bn in tariff-driven blows to profits for the year. In May, Ford also announced it would have to raise prices on some of its cars made in Mexico, including the Mustang Mach-E electric SUV, Maverick pick-up truck and Bronco Sport, in some cases by as much as $2,000, the Reuters news agency reported. Those cars began to reach lots last month. 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'Tariffs will be inflationary on both the new and used vehicle market,' Schirmer said, adding, the main challenge right now is the unsold inventory that's piling up. Analysts believe that prices will continue to rise amid Trump's tariffs, especially as companies try to move supply chains to the US, as demanded by Trump, an effort that is years in the making. 'The tariff 'relief' is like putting a band-aid on a bullet wound with US car companies now dealing with the repercussions moving forward as this Twilight Zone situation will change the paradigm for the US auto industry for years to come,' Dan Ives, analyst at Wedbush Securities, said in a note provided to Al Jazeera. In the meantime, the cost to import a car is expected to increase by $1,000 this year to $5,700, according to Cox Automotive. 'The US imports a little less than half of the new vehicles sold, but dependence on imports varies substantially by segment. The most dependent segments are at the two ends of the price spectrum – the most affordable vehicles and luxury vehicles. Most of the vehicles priced under $30,000 would face added costs that would make them unaffordable,' Cox Automotive chief economist Jonathan Smoke said in a June conference call shared with Al Jazeera. EVs hit hard Trump's new tax legislation – signed into law last month and which cut the EV tax credit of up to $7,500 – has already led to a significant pullback specifically for the electric vehicle marketplace as demand for the products begins to fall. 'Our forecast had been for approximately 10 percent of new vehicle sales this year to be EV. We slightly lowered that to 9 percent,' Schirmer added. Volvo reported a 26 percent decline in sales for electric vehicles (12 percent overall). Ford EV sales tumbled by 31 percent. Rivian saw sales decline by 23 percent. 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Manufacturing strains While US manufacturing ticked up overall in June, when it comes to motor vehicle and parts production, it is a different story. Production tumbled by 2.6 percent for the month as demand began to slow. US auto manufacturing employment is also down. According to the Bureau of Labor Statistics, employment in auto manufacturing in the United States has tumbled by 35.7 percent since this time last year and down 2.4 percent from this time last month. Al Jazeera reached out to the United Auto Workers for comment about the effect on car manufacturing jobs, but the organisation did not respond. 'Demand was not growing as fast as needed, and many manufacturers were caught by surprise. That's a problem, and it is kind of a longer-term, structural issue,' Golara said.
Al Jazeera
an hour ago
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Automakers brace for profit hits in anticipation of tariff price hikes
After a wave of rushed buying, driven by looming tariffs, US car sales have started to slow, weighing on carmakers. New car sales fell by 300,000 in June from 15.6 million to 15.3 million, according to data released by Cox Automotive last month. 'Now we've got sales slowing because [the pre-tariff buying] surge pretty much pulled ahead a lot of people that might have been in the market this year, who wanted to buy before tariffs hit,' Mark Schirmer, director of industry insights at Cox Automotive, told Al Jazeera. This will only get harder for carmakers, dealerships and shoppers down the road. 'Price rises together with demand destruction,' Sina Golara, assistant professor of supply chain management at Georgia State's Robinson College of Business, told Al Jazeera. 'If consumers don't have the resilience to pay for those higher prices, they'll take a step back.' United States President Donald Trump's erratic approach to tariffs, putting some in place and then taking them away, has made it difficult for businesses to plan. In April, car companies, including Stellantis, Ford and Volvo, suspended financial guidance as a result of the uncertainty. Last month Volvo also said that tariffs will cost it $1.2bn in the second quarter. Ford then announced it expects a reduced annual profits to $3bn after taking an $800m hit from tariffs in the second quarter. GM announced that it expects a $5bn hit, and Toyota said it expects $9.5bn in tariff-driven blows to profits for the year. In May, Ford also announced it would have to raise prices on some of its cars made in Mexico, including the Mustang Mach-E electric SUV, Maverick pick-up truck and Bronco Sport, in some cases by as much as $2,000, the Reuters news agency reported. Those cars began to reach lots last month. As a result, consumers are overwhelmingly opting for used cars that are not subject to tariffs, including foreign-made ones, as they are already on US roads. Used car sales are up 2.3 percent from this time last year, according to Used Car Index report, an auto industry insight platform by Edmunds. In part, this is because of the limited supply of used cars. Edmunds's report says that buyers, and sellers looking to upgrade but need the money from sale of a current car, are hesitant about undertaking expenses amid economic uncertainty. The bigger impact of both those trends is of inventory piling up. On average, dealerships have 82 days worth of cars on the lot, a roughly 14 percent increase between May and June. An expensive escalation Cox forecasts prices could rise anywhere between 4 to 8 percent over the next six months as a result of the tariffs. The group expects new car sales of 13 million to 13.3 million this year. 'Tariffs will be inflationary on both the new and used vehicle market,' Schirmer said, adding, the main challenge right now is the unsold inventory that's piling up. Analysts believe that prices will continue to rise amid Trump's tariffs, especially as companies try to move supply chains to the US, as demanded by Trump, an effort that is years in the making. 'The tariff 'relief' is like putting a band-aid on a bullet wound with US car companies now dealing with the repercussions moving forward as this Twilight Zone situation will change the paradigm for the US auto industry for years to come,' Dan Ives, analyst at Wedbush Securities, said in a note provided to Al Jazeera. In the meantime, the cost to import a car is expected to increase by $1,000 this year to $5,700, according to Cox Automotive. 'The US imports a little less than half of the new vehicles sold, but dependence on imports varies substantially by segment. 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Manufacturing strains While US manufacturing ticked up overall in June, when it comes to motor vehicle and parts production, it is a different story. Production tumbled by 2.6 percent for the month as demand began to slow. US auto manufacturing employment is also down. According to the Bureau of Labor Statistics, employment in auto manufacturing in the United States has tumbled by 35.7 percent since this time last year and down 2.4 percent from this time last month. Al Jazeera reached out to the United Auto Workers for comment about the effect on car manufacturing jobs, but the organisation did not respond. 'Demand was not growing as fast as needed, and many manufacturers were caught by surprise. That's a problem, and it is kind of a longer-term, structural issue,' Golara said.
Al Jazeera
2 hours ago
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Donald Trump names Kiss, Sylvester Stallone as Kennedy Center Honors picks
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In his opening remarks, he suggested his allies strong-armed him into taking the hosting gig. 'I've been asked to host. I said, 'I'm the president of the United States. Are you fools asking me to do that?'' Trump said. ' So I have agreed to host. Do you believe what I have to do?' Wednesday's announcement was Trump's latest foray into the arts, as he seeks to reshape the US's cultural institutions to reflect his agenda. During Trump's first term, from 2017 to 2021, the Republican leader never attended the Kennedy Center Honors, breaking with a longtime presidential tradition. Since the ceremony's beginnings in 1978, presidents have been regular attendees, except in rare cases, including Cold War-era negotiations and the 1979 Iran hostage crisis. But since returning to the White House for a second term in January, Trump has not only sought to make his presence known at the Kennedy Center, but he has sought to wield power over its programming. On February 7, Trump announced he would purge the Kennedy Center's governing board and declared his intention to lead the institution as its chair. 'I have decided to immediately terminate multiple individuals from the Board of Trustees, including the Chairman, who do not share our Vision for a Golden Age in Arts and Culture,' Trump wrote at the time. 'We will soon announce a new Board, with an amazing Chairman, DONALD J. TRUMP!' By February 12, the new Kennedy Center board had made good on its promise to elect Trump as chair. Since then, Trump has expanded his reach into the country's arts and culture spheres. On Tuesday, for instance, his administration revealed it would undertake an 'internal review' of several Smithsonian museums, to 'ensure alignment with the President's directive to celebrate American exceptionalism'. Trump also teased his new vision for the Kennedy Center Honors — and appeared to troll critics who expressed outrage over Republican proposals to rename the performing arts center after the Republican leader. 'GREAT Nominees for the TRUMP/KENNEDY CENTER, whoops, I mean, KENNEDY CENTER, AWARDS,' Trump wrote on social media in the lead-up to Wednesday's announcement. He pledged the revamped award show would reflect 'the absolute TOP LEVEL of luxury, glamour, and entertainment'. The Kennedy Center Honors is expected to air on the TV channel CBS in December, and it broadcasts from its eponymous theatre. In Wednesday's speech, Trump tied the upcoming ceremony to his broader campaign to crack down on crime in Washington, DC. ' In the coming months, we'll fully renovate the dated and, really, the entire infrastructure of the building and make the Kennedy Center a crown jewel of American arts and culture once again,' he said. ' We have the right location and soon we will be a crime-free area.' Earlier this week, Trump invoked the capital's Home Rule Act to take control of the local police force and deployed members of the National Guard to patrol the city's streets, despite the fact that violent crime in the city was at a 30-year low. Trump, however, has denied the legitimacy of those statistics, a claim he made again at the Kennedy Center on Wednesday. ' You're gonna see a big change in Washington crime stats very soon — not the stats that they gave because they turned out to be a total fraud. The real stats,' he said. The Republican leader also hinted at potential political bent to the reimagined Kennedy Center Honors. He has previously denounced the Kennedy Center's programming, pledging to cancel performances including drag shows and book classic Broadway hits instead. In response, the touring Broadway production of the hit musical Hamilton cancelled its scheduled stop at the Kennedy Center, as did comedian Issa Rae and the opera Fellow Travelers. Performers in a touring production of Les Miserables also boycotted shows to protest Trump's changes. 'I shouldn't make this political because they made the Academy Awards political and they went down the tubes,' Trump said on Wednesday. 'They'll say, 'Trump made it political,' but I think if we make it our kind of political, we'll go up, OK? Let's see if I'm right about that.'
