Powell requests watchdog review of US$2.5b Fed renovation amid Trump pressure
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The news: US Federal Reserve Chair Jerome Powell has asked the central bank’s inspector general, Michael Horowitz, to review the costs of the Fed’s USD2.5 billion ($3.82 billion) headquarters renovation project, amid growing criticism from Trump administration officials.
The numbers: The request, first reported by Axios, was made over the weekend, according to sources familiar with the matter who spoke to the news media. A spokesperson for the inspector general’s office confirmed the request to Bloomberg.
Republicans have criticised Powell over cost overruns in the Fed’s USD2.5 billion renovation project. Some have alleged the project included changes not approved by federal planning authorities and suggested it could justify removing him “for cause.”
Powell, at a congressional hearing last month, denied reports that the renovation includes exaggerated luxury upgrades from private elevators to a private dining room.
The context: Trump has long criticised Powell for not cutting interest rates and is now using the building renovation to push for his removal.
Trump cannot dismiss Powell, whose term runs until 15 May 2026, over policy disagreements. But according to media reports, Trump allies are trying to build a legal argument that Powell violated federal planning rules or misled Congress.
The renovation project has been underway for years, and the Fed argues Congress, through the Federal Reserve Act, has vested the board with control of its buildings “and both the responsibility and authority to determine all of its expenses and obligations,” according to a Q&A the Fed published over the weekend to address several points raised by Office of Management and Budget Director Russ Vought, who has said President Trump was “extremely troubled” by the project.
In the note, the central bank said no new VIP dining rooms are being built, no elevators are reserved for governors, and that recent design changes were made to streamline remaining construction, reduce delays and limit further cost overruns.
The Fed said the project aims to consolidate operations, eliminate the need for leased office space, and modernise two historic buildings that had not been comprehensively renovated since the 1930s, citing issues such as asbestos, outdated systems and structural deficiencies.
The sources: US Federal Reserve, Axios, Bloomberg
