On December 30, 2025, President Trump expressed his consideration of filing a lawsuit against Federal Reserve Chairman Jerome Powell on the grounds of “gross incompetence.” Trump accused Powell of being “incompetent” in managing the renovation project at the Federal Reserve headquarters and stated that the project costs had “significantly exceeded the budget.”
During a joint press conference with Israeli Prime Minister Benjamin Netanyahu at Mar-a-Lago in Florida, Trump also announced that he would unveil the next nominee for the Federal Reserve chairman in January next year.
Trump mentioned that Powell was solely responsible for the renovation project at the Federal Reserve, which ended up with “severe overspending.” The White House is contemplating filing a lawsuit based on “gross incompetence.”
When asked by reporters if he would replace Powell, Trump reiterated the possibility. He expressed his desire to “fire him” but acknowledged that Powell’s term as chairman was “very close to ending,” adding, “maybe I will still do it.”
Trump did not reveal his preferred successor but clearly stated that personnel announcements would be made public “at some point in January.”
Currently, Kevin Hassett, the Director of the National Economic Council, is regarded as a potential candidate, along with former Fed Governor Kevin Warsh, and other mentioned candidates include current Fed governors Christopher Waller, Michelle Bowman, and Rick Rieder of BlackRock.
Powell’s term as Federal Reserve Chairman is expected to end in May 2026, while his term as a member of the Federal Reserve Board extends until 2028. If Powell chooses to remain as a board member after stepping down as chairman, it will limit the White House’s ability to reappoint board members in the short term.
Trump has critiqued the Federal Reserve’s monetary policy multiple times recently, believing that the rate cuts have been insufficient. He reiterated at the press conference that Powell is “always too late” on interest rate issues.
The Federal Reserve has cut interest rates three times this year, with the most recent one on December 10, which Trump believed could have been “doubled.”
In December, the Federal Reserve once again lowered the target range for the federal funds rate by 25 basis points to 3.5% to 3.75%. However, Fed officials previously hinted that there might only be one more rate cut in 2026 to strike a balance between stimulating the economy and guarding against inflation risks.