President Trump, escalating his pressure campaign against the Federal Reserve chairman, Jerome Powell, to cut interest rates, says he is considering allowing a “major lawsuit” to proceed against the Fed head over the chairman’s handling of renovations to the central bank’s headquarters. 

Mr. Trump took to Truth Social on Tuesday to announce that he is “considering allowing a major lawsuit against Powell to proceed” over what he called the Fed head’s “horrible, and grossly incompetent” management of the headquarters renovation project. He chided the central banker for allowing the project to balloon to $3 billion, arguing that the job “should have been a $50 Million Dollar fix up.”

The president did not specify which lawsuit he was referring to, though the Fed has faced criticism from the White House over its plan to revamp the central bank’s headquarters at Washington, D.C. The conflict came to a head last month when the president and the Fed chairman clashed over the cost of the renovation while touring the construction site. 

The argument arose when Mr. Trump said that the project was estimated to cost $3.1 billion. Mr. Powell disputed the president’s figure, arguing that his number included the cost of a project completed years ago. The Fed has placed the total cost of the current project at $2.5 billion. 

Mr. Trump’s legal threat came alongside renewed demands for immediate rate cuts in light of a somewhat encouraging inflation report released Tuesday morning. 

“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,” the president wrote. 

The Consumer Price Index report that triggered Mr. Trump’s response showed annual inflation holding steady at 2.7 percent in July — unchanged from June and slightly below economists’ 2.8 percent forecast. The CPI tracks the prices of a wide range of goods and services, including food, clothing, housing, and transportation, and reflects changes in the cost of living.

However, the figure posted for core CPI — which excludes food and energy prices, which tend to be more volatile and due to factors like seasonal changes — exceeded expectations. Core CPI rose 3.1 percent over the past 12 months, slightly above forecasts of a 3 percent increase. 

Still, Tuesday’s report appears to reduce immediate concerns about Mr. Trump’s tariff policies driving inflation while supporting the case for Fed rate cuts at the September meeting.

The White House press secretary, Karoline Leavitt, claimed the report as a win, stating, “The Panicans continue to be proven wrong by the data — President Trump’s tariffs are raking in billions of dollars, small business optimism is at a five-month high, and real wages are rising.” 

Economist Joseph Lavorgna, who serves as an advisor to Secretary Scott Bessent, stated that the inflation report shows “no negative impact from tariffs.” 

Some analysts warn, however, that the fallout may pick up later in the year as more tariffs go into effect. 

“Tariffs are still coming,” an economist at ITR Economics tells the Sun. “Tariffs are absolutely inflationary but our analysis says that historically tariffs take between nine and 18 months to really flow through on the macro economic scale.”