Powell Orders Probe Into HQ Renovations As Trump Slams Fed Spending/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Federal Reserve Chair Jerome Powell has requested an inspector general review of the Fed’s $2.5 billion building renovations amid criticism from President Trump. The administration labels the project “ostentatious” and accuses Powell of mismanaging costs. The controversy underscores rising tensions over Fed independence and interest rate policy.
Fed Renovation Controversy Quick Looks
- Fed’s building overhaul costs swell to $2.5 billion
- Trump administration calls renovations “ostentatious” and excessive
- Powell requests independent probe by Fed’s inspector general
- Fed faces scrutiny over potential violations of local building rules
- Renovation costs surged $700 million over initial estimate
- Trump pressures Fed for interest rate cuts
- Fed’s independence challenged amid political tensions
- Officials question alleged luxurious amenities in new design
- Powell unlikely to resign before term ends next May
- Fed maintains mandate of stable prices and full employment
Deep Look
Trump Targets Fed Renovation Spending as Powell Seeks Independent Review of Costly Project
WASHINGTON — Federal Reserve Chair Jerome Powell has asked the central bank’s inspector general to investigate spiraling costs tied to a multibillion-dollar renovation of its Washington, D.C. buildings, as President Donald Trump and his administration escalate attacks against the Fed’s spending and leadership.
A spokesperson for the Fed’s inspector general, the agency’s internal watchdog, confirmed Powell’s request for a formal review but declined to offer further comment on the pending investigation. News of the inquiry was first reported by CNBC.
A Ballooning Price Tag
The Federal Reserve has been engaged for years in extensive renovations of two office buildings near the National Mall. While initially projected to cost roughly $1.8 billion, the price tag has ballooned to an estimated $2.5 billion—a $700 million increase.
Details of the renovations have become a flashpoint for criticism from the Trump White House, with officials questioning the necessity of certain upgrades and hinting at potentially lavish amenities within the new facilities.
“President Donald Trump is extremely troubled about the ostentatious overhaul of the Federal Reserve buildings,” said Russ Vought, Trump’s top budget adviser, in remarks Thursday. “There’s significant concern that this project might even violate local building regulations.”
A Clash Over Fed Independence
The dispute over construction costs highlights broader tensions between Trump and Powell, who have been at odds throughout Trump’s presidency over monetary policy and the Fed’s independence. The Federal Reserve, established as an autonomous institution, is charged with promoting stable prices and maximum employment—ideally shielded from day-to-day political pressures.
However, the president has repeatedly demanded that Powell slash short-term interest rates in hopes of reducing government borrowing costs and boosting economic growth.
“Trump has made no secret of his dissatisfaction with Powell’s refusal to move aggressively on rate cuts,” said a senior financial analyst speaking anonymously because of the political sensitivity of the issue.
Critics Seize on Cost and Perception
The costly renovations have become a symbolic cudgel for Trump and conservative allies seeking to portray the Fed as out of touch. Officials have criticized elements of the renovation that they allege could include upscale design features, although specific details remain undisclosed.
“It’s not just the dollar amount—it’s what that money is being spent on,” said one administration official. “People are struggling with high living costs, and the Fed is spending billions upgrading office buildings.”
While the Fed insists the renovations are necessary for safety, security, and modernization, critics argue the timing—and scope—appear tone-deaf amid economic pressures facing average Americans.
Political Pressure Mounts
The Trump administration’s increasingly aggressive posture toward the Fed raises questions about the central bank’s future independence. Historically, presidents have refrained from overt interference in monetary policy, allowing the Fed to make decisions insulated from short-term political interests.
But Trump has shattered those norms, repeatedly suggesting Powell should resign and implying that the Fed’s high rates have hindered the administration’s broader economic goals.
“Trump believes that lower interest rates will ease the federal government’s debt burden and support continued economic expansion,” said a political strategist familiar with the administration’s views. “This renovation issue is another way for him to apply pressure.”
Despite the White House’s intensifying criticism, there’s no indication that Powell plans to step down before his term expires in May of next year.
Fed’s Mission Remains Unchanged
Amid political turbulence, Powell has continued to emphasize the Fed’s dual mandate of achieving stable prices and maximum employment. The central bank’s decisions on interest rates and broader policy remain closely watched by Wall Street, businesses, and global markets.
Meanwhile, the outcome of the inspector general’s review could either validate Trump’s concerns or clear the Fed of any accusations of wasteful spending.
The controversy surrounding the Fed’s building renovations underscores a deeper battle: the struggle to maintain the central bank’s independence in an increasingly polarized political environment.
As Powell braces for further scrutiny, the question remains whether the Federal Reserve can insulate its critical economic decisions from the swirl of political storms—especially under a president who shows little inclination to back down.
You must Register or Login to post a comment.