President Donald Trump demanded Tuesday that Federal Reserve member and former chair Jerome Powell resign or face a federal lawsuit. A prominent economist says the attack will probably keep Powell in his job longer.
"I can't think of a more effective way to ensure that Jay Powell stays on the Fed, and I want to thank the President for his creative efforts to retain him," Justin Wolfers, an economist at the University of Michigan, wrote on X.
Trump's long Truth Social post responded to an inspector general's report on the renovation of the Fed's Washington headquarters. He quoted the report's finding that there were "deficiencies in the management of the renovation project." He also claimed the cost will reach "at least 2.5 Billion Dollars, with no end in sight."
"This is Jerome Powell's fault, and he should be forced to resign, IMMEDIATELY!" Trump wrote. "If he doesn't resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence, both of which are completely unacceptable."
Trump said he has asked Attorney General Todd Blanche to "study the report." He went after Powell's interest rate policy too, calling it "High Interest Rate Policy (only on 'TRUMP')." He also claimed he "could have done a far better Renovation for 25 Million Dollars."
He then added a line that seemed to answer a question no one had asked.
"And no, I do not want this Building named after President Donald J. Trump, ME!" he wrote.
Wolfers' point is that Powell would be unlikely to step down while the president is publicly pressuring him, since leaving would look like the Fed bending to political attacks. And threatening to bring the weight of the federal government upon him would help Powell in any court case related to him leaving the job.
Trump has fought with Powell for years over interest rates. In 2025, he used the renovation's rising costs to attack Powell and floated firing him.