Fed Chair Powell requests IG review of $2.5B HQ revamp amid Trump attacks

Federal Reserve Chair Jerome Powell has reportedly asked the central bank’s inspector general to review its $2.5 billion headquarters renovation, a project that has become a key focus of escalating attacks from the Trump administration.  

A source familiar with the matter told Axios that Powell directed Inspector General Michael Horowitz to examine the project’s costs and any other related matters Horowitz deems appropriate. 

The Trump administration has zeroed in on the lavish renovation project — and accusations that Powell lied to a Senate committee about the fancy amenities that are being planned — as part of a broader campaign to pressure Powell, who has consistently rebuffed President Donald Trump’s demands to cut interest rates.

Kevin Hassett, a White House economic adviser, said over the weekend that Trump has the authority to fire Powell for cause if evidence supports such a move — adding that the central bank chief “has a lot to answer for” on renovation cost overruns at the DC headquarters.

In late April, The Post was the first to report that the central bank was moving forward with extensive renovations as part of a $2.5 billion overhaul of the Marriner S. Eccles Federal Reserve Board Building on the corner of 20th St. and Constitution Ave. — despite being more than $700 million over budget.

In recent days, Trump has installed loyalists atop the National Capital Planning Commission (NCPC), which oversees federal building design, and a top White House official has suggested that the Fed made changes to its renovation plans that violate NCPC guidelines, according to Axios.

The Federal Reserve’s renovation plan includes overhauling three buildings — two of which are historic structures dating back to the 1930s — and creating a new visitors center.

The project has drawn criticism from Trump allies, who accuse the central bank of pursuing an overly lavish redevelopment. 

Office of Management and Budget Director Russell Vought, a close Trump ally, has been one of the most vocal critics of the renovation. On Thursday, Vought said Powell “has grossly mismanaged the Fed” and denounced what he called an “ostentatious overhaul.”

In a letter posted on X, Vought claimed the renovation included “rooftop terrace gardens, VIP private dining rooms and elevators, water features, premium marble, and much more.” 

The following day, the Federal Reserve responded by quietly posting a Frequently Asked Questions (FAQ) page on its website addressing the project and defending its scope.

“No new VIP dining rooms are being constructed as part of the project,” the FAQ states.

According to the Fed, the buildings “have not been comprehensively renovated since their construction” nearly 100 years ago.

Regarding the Eccles Building, the Fed noted that it “has conference rooms, which are being renovated and preserved. They are also used for mealtime meetings.” 

The FAQ outlines the primary drivers of the project’s rising costs, which have become a focal point for critics.

The Fed cites “changes to original building designs as a result of consultation with review agencies” and “unforeseen conditions,” including higher-than-expected levels of asbestos, as reasons for the increased spending. 

The Fed emphasized that the cost of the renovations is not covered by taxpayer dollars.

The Federal Reserve is self-funded through interest it earns on securities and through fees charged to banks. 

In a statement on CNBC Friday, Vought pledged to continue scrutinizing the renovation, saying: “We want to make sure we have facts as to the largesse and the extent to which it’s overrun.”

His remarks followed a post the previous day on X, where he wrote: “While continuing to run a deficit since FY23 (the first time in the Fed’s history), the Fed is way over budget on the renovation of its headquarters.” 

The Federal Reserve Act grants the Board of Governors broad authority over its facilities. The law states that the board “may maintain, enlarge, or remodel any building or buildings” it has acquired or built and “shall have sole control of such building or buildings and space therein.”

In its new FAQ, the Fed asserted that it “generally is not subject to direction from the NCPC on its building projects,” and added that it did not believe the project required “further review” beyond what was approved in 2021. 

This is not the first time the Inspector General’s office has reviewed the long-planned renovation project, but the request from Powell is intended as a fresh look amid intensified political scrutiny.

The move comes as the Trump administration escalates its campaign to oust Powell, whose term as Fed chair ends next year. 

Trump has repeatedly accused Powell of playing politics by not lowering interest rates and has publicly called on him to resign. Powell has consistently resisted pressure from the White House and maintained the independence of the central bank. 

The FAQ posted by the Fed represents a rare public pushback by the institution as it seeks to defend its renovation project and preserve its autonomy in the face of mounting political pressure. 

The Post has sought comment from the White House and the Fed.