Wall Street titans slam DOJ Fed probe over $2.5B ‘Palace of Versailles’ HQ revamp: ‘counterproductive’

JPMorgan Chase CEO Jamie Dimon slammed the Trump administration’s move to open an investigation into Fed Chair Jerome Powell over the $2.5 billion revamp of its headquarters, warning that threats to the central bank’s independence could raise interest rates and stoke inflation.

GOP lawmakers and White House insiders accuse Powell of lying to Congress about the work during his testimony in June, prompting US Attorney Jeanine Pirro to step in and order the probe.

But JPMorgan boss Jamie Dimon, speaking during a media call to unveil the bank’s fourth-quarter results, defended Powell, saying “anything that chips away” at the central bank’s independence “is not a good idea.”

“In my view, it will have the reverse consequences. It will raise inflation expectations and probably increase rates over time,” the 69-year-old Wall Street veteran said.

The Post broke the news last April about the plan to push ahead with splashy renovations, running $700 million over budget, to the organization’s headquarters at a time when it is losing money.

It prompted critics to accuse Fed officials of behaving like French royalty building “the Palace of Versailles.”

Powell’s term as chair is set to end in May, with Kevin Hassett, President Trump’s top economic adviser, in the frame to replace him.

Bank of New York chief executive Robin Vince echoed Dimon’s criticism as the company reported record revenue for 2025 on Tuesday. The British-born Goldman alum said the move to investigate Powell is “counterproductive” to the administration’s goal of improving affordability.

“Questioning one of the tenets that underlies the bond market runs the risk of actually doing the opposite of that,” Vince said.

“Independent central banks with the ability to independently set monetary policy in the long-term interests of the nation is a pretty well-established thing that we’ve seen all around the world over a very long period of time,” Vince said.

Jeremy Barnum, JPMorgan Chase’s bean counter-in-chief, added: “I think the larger question is damage to United American economic prospects, and, frankly, global economic stability.”

The comments from the Wall Street bigwigs come after a group of global central bankers took the extraordinary step to show their “full solidarity” with Chair Powell in a rare joint statement.

“The independence of central banks is a cornerstone of price, financial, and economic stability in the interest of the citizens that we serve. It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability,” the group of 12 central bankers, including European Central Bank president Christine Lagarde, said.

The fact that all these central bankers are speaking up together shows just how worried they are that the Federal Reserve is losing its freedom to make independent decisions.

Usually, such coordinated actions only happen during major global disasters, like the 2008 financial crash or the pandemic, rather than just to defend one person

Powell, 72, accused the DOJ in a Sunday video message of looking to probe the renovation work and his testimony to Congress as a means of trying to bully the central bank into slashing borrowing rates.

The lavish project, first rubber-stamped by government pen-pushers in 2021, is now effectively being subsidized by American taxpayers because the Fed has not made a profit since 2022.

Fed insiders blame the huge cost overrun on inflationary pressures, as well as the discovery of lead paint and asbestos on the site.

The overhaul, which was managed by Powell when he was a Fed governor, is focused on modernizing two downtown complexes on the Fed’s D.C. campus, known as the Eccles and FRB-East buildings.

Planning documents promise a refresh inspired by the Eccles’ original style, designed by French-born Philadelphia architect Paul Cret.

It says both buildings will use Georgian white marble and “create a place where the interchange among citizens would be advanced within the framework of the republic’s institutions.”

The Fed’s 3,000 staff are mainly working out of the William McChesney Martin Jr building, which underwent a previous upgrade that was completed in 2021.

Normally, when the Fed makes a profit, it sends the leftover cash to the U.S. Treasury to help fund the running of the country. Because the Fed is losing money, it has stopped sending these payments.

It means Uncle Sam is getting less revenue, which increases the national debt, and the government has to borrow more money to make up the difference.

Its mounting losses, currently some $243 billion, are bundled together in what is known as the Fed’s “deferred asset” that it must pay down before money can be spent on other things such as defense, education, and Medicare.

A 2023 study by experts at the St Louis Fed forecast that it will not happen until mid-2027 at the earliest, but recent data points suggest that the number is coming down, hinting that the central bank is finally on the road back to profitability.