Frank Nez 
On August 11, 2025, President Donald Trump escalated his feud with Federal Reserve Chairman Jerome Powell, threatening a “major lawsuit” over the central bank’s handling of interest rates as the economic fallout from his tariff policies drives up consumer prices.
In a fiery Truth Social post, Trump accused Powell of sabotaging the economy and claimed his tariffs have generated billions in revenue despite rising costs for Americans.
The threat, which comes amid growing market unease, underscores tensions between the White House and the Federal Reserve, raising concerns about economic stability and the independence of monetary policy.
Trump’s post singled out Powell, whom he called a “major loser,” and criticized former Treasury Secretary Steven Mnuchin for supporting Powell’s appointment during Trump’s first term.
“Steve ‘Manouychin’ really gave me a ‘beauty’ when he pushed this loser,” Trump wrote, misspelling Mnuchin’s name.
He claimed the U.S. economy is “great” with “virtually No Inflation,” citing food and energy costs, and argued that Powell’s refusal to cut interest rates is costing the nation trillions.
Trump’s threat of legal action follows months of pressure on Powell, including calls to fire him, despite legal barriers outlined in the Federal Reserve Act of 1913, which allows dismissal only “for cause,” not policy disagreements, per USA Today.
The president also defended his tariff regime, launched on “Liberation Day,” which imposes 10 to 49 percent import taxes on countries like China, Canada, and Mexico.
Trump claimed these tariffs are “bringing Billions of Dollars into the USA,” echoing sentiments from an August 1, 2025, X post by @EricLDaugh.
However, rising consumer prices, particularly for groceries and goods, have sparked public discontent, with The Wall Street Journal reporting a tariff-induced market sell-off in April 2025.
Powell, in a July 2025 statement, explained the Fed’s decision to hold rates steady due to tariff-related inflation uncertainties, saying, “We’re simply taking some time,” as cited by NBC News.
Economic and Political Fallout
Trump’s lawsuit threat follows a pattern of aggressive rhetoric against Powell, whom he has called “too late, too angry, too stupid, and too political” in a July 31, 2025, Truth Social post, per @LondonRealTV
on X.
The president’s push for lower interest rates, which he claims would save $800 billion annually, contrasts with Powell’s focus on the Fed’s mandate of full employment and price stability, as noted in a June 2025 congressional testimony reported by The Hill.
Legal scholars, cited by The Hill, argue that Trump lacks the authority to unilaterally fire Powell, whose term ends in May 2026, and the Supreme Court’s May 2025 ruling clarified that the Fed’s unique structure protects its independence.
Public sentiment on X is divided.
Supporters like @scottmelker praised Trump’s tariff revenue claims, while critics, including @TheDemCoalition, warned of economic chaos, citing consumer price hikes and a potential recession, as echoed by polls showing Trump’s approval rating at 39% in an ABC News/Washington Post/Ipsos survey.
Economists, including Sen. Elizabeth Warren in a Raw Story report, have raised alarms about Trump’s policies, with Warren warning that tariff-driven inflation could mirror the 2008 financial crisis.
ING analysts, quoted by NBC News, cautioned that removing Powell could spike U.S. debt yields and trigger market volatility, making imports and travel costlier for Americans.
Trump’s attacks on Powell coincide with broader economic challenges, including a five-year low in consumer confidence reported by CNBC on April 30, 2025.
His tariff policies, while softened for some auto parts to encourage U.S. manufacturing, have drawn criticism for increasing costs, with Powell noting that “somebody pays the tariffs,” ultimately impacting consumers, per The Hill.
The Federal Reserve’s decision to pause rate cuts for five consecutive meetings, as reported by USA Today, reflects caution amid tariff-induced inflation, with the next meeting scheduled for August 26-27, 2025.
The lawsuit threat also follows Trump’s legal battles with media outlets, including a $10 billion defamation suit against The Wall Street Journal over its Epstein-related reporting, as noted by The Hill.
These actions highlight Trump’s combative approach to critics, from media to federal officials, as he navigates his second term.
The controversy over Powell’s leadership, coupled with tariff impacts, could further roil markets and shape public perception ahead of the 2026 midterms.
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