Fed under pressure as policy uncertainty grows before Jackson Hole

The Federal Reserve is confronting a moment of heightened political pressure and genuine policy uncertainty as it prepares for a key round of meetings in September and a high-profile address at Jackson Hole. President Donald Trump intensified his attack on Fed Chair Jerome Powell, signaling a willingness to pursue a lawsuit over the central bank’s headquarters renovations, even as markets and policymakers weigh whether the Fed will curb interest rates soon. The debate centers on whether the economy needs faster relief from borrowing costs amid mixed signals from inflation, the labor market and the impact of tariffs.

Costs and controversy surrounding the Fed’s Marriner S. Eccles Building renovation have become a flashpoint in the broader policy conversation. The Office of Management and Budget estimated the project at about 2.5 billion dollars, roughly 700 million above the initial 2017 budget, with figures cited by critics reaching as high as 3 billion due to features such as terrace areas and premium finishes. Federal officials defend the renovation as replacing obsolete 1930s-era systems and removing hazardous materials, noting that claims of VIP facilities have been...