Donald Trump threatened a “major lawsuit” against Federal Reserve Chairman Jerome Powell as the cost of the president’s tariffs showed up in the prices Americans are paying on Tuesday.
The president raged that Powell “must NOW lower the rate” in a Truth Social post in which he also blasted his former Treasury Secretary Steve Mnuchin, saying, “Steve ‘Manouychin’ really gave me a ‘beauty’ when he pushed this loser.”
In an escalation of his months-long war against Powell, he threatened a lawsuit against him for the $2.5 billion cost of the Fed renovation.
“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,” Trump wrote.
His attack on Tuesday came as the latest Consumer Price Index (CPI) released that morning showed core inflation, which excludes food and energy, came in slightly hotter than expected and had its largest one month increase since January when the president took office.
The CPI found core inflation was up 0.3 percent for last month and up 3.1 percent from a year ago, the largest annual increase since February.
While the numbers were largely on target with economists’ expectations and slightly below expectations when it came to overall inflation, Trump’s tariffs appear to be having an impact as businesses pass the costs on to American consumers.
Economists do not believe that the latest data will deter the Federal Reserve when it comes to cutting rates in September, but Trump has been livid with the Fed holding them steady for months.
The president’s team has been adamant that his tariffs imposed on other countries are not causing price increases in the U.S. but the latest data shows otherwise.
Powell warned at his press conference late last month that tariffs were starting to show up in consumer prices.
It was a mixed bag when it came to where the price increases were hitting. The prices of household furnishings and supplies were up 0.7 percent in July after a one percent increase the month before. The cost of apparel has been trending upward over the last two months after dropping previous months.
The prescient also appeared to acknowledge on Tuesday that the cost of tariffs is passed on to consumers to some extent, saying “it has been shown that, for the most part, Consumers aren’t even paying these Tariffs.” Instead, he claimed, it was “mostly Companies and Governments” are picking up the tabs.
Trump has allowed some of his threatened tariffs to go into effect, but he has postponed implementing others. Widespread tariffs that kicked in last week would not be reflected in the July CPI report.
On Tuesday, the president signed an executive order to delay high tariffs on imports from China for another 90 days.
While the president ranted against Powell, the White House on Tuesday touted the CPI report. Press Secretary Karoline Leavitt said in a statement that inflation “beat market expectations once again and remain stable.”
Her statement comes as the Trump administration has been actively working to undermine confidence in the Bureau of Labor Statistics which supplies the CPI, and Trump fired the BSL commissioner following last month’s brutal jobs report.
Trump announced late on Monday that he was nominating E.J. Antoni, chief economist for the conservative Heritage Foundation, as the next BLS commissioner.
Economists across the spectrum have slammed him as unqualified for the job and lacking the necessary experience.
