Trump Threatens Lawsuit Against Powell as Tariff Costs Impact American Consumers

Strategic Insights -

As the cost of President Donald Trump's tariffs continues to rise, Trump has escalated his war against Federal Reserve Chairman Jerome Powell, threatening a "major lawsuit" against him for the $2.5 billion cost of the Fed renovation. The latest Consumer Price Index (CPI) report shows that core inflation, which excludes food and energy, has its largest one-month increase since January, with a 0.3% increase for last month and 3.1% from a year ago, the largest annual increase since February. Economists do not believe that the latest data will deter the Federal Reserve from cutting rates in September, but Trump has been livid with the Fed holding rates steady for months.

Key Takeaways:

  • Trump has threatened a "major lawsuit" against Powell for the $2.5 billion cost of the Fed renovation.
  • The latest CPI report shows core inflation increased 0.3% for last month and 3.1% from a year ago, the largest annual increase since February.
  • The prices of household furnishings and supplies were up 0.7% in July after a one percent increase the month before.
  • Trump has allowed some of his threatened tariffs to go into effect, but has postponed implementing others.
  • The president signed an executive order to delay high tariffs on imports from China for another 90 days.
  • The White House touted the CPI report, claiming inflation "beat market expectations once again and remain stable."

Statistics:

  • The CPI found core inflation was up 0.3% for last month.
  • Core inflation was up 3.1% from a year ago, the largest annual increase since February.
  • The prices of household furnishings and supplies were up 0.7% in July.
  • The cost of apparel has been trending upward over the last two months.

Sources:

  • Adelson, Miriam. "Trump Threatens Lawsuit Against Powell As His Economy Sinks." The Daily Beast, 2 Aug. 2023, https://www.thedailybeast.com/trump-threatens-powell-with-lawsuit-as-his-economy-sinks/.