Trump Eyes Fed Chair Powell’s Ouster Over Renovation/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Trump is exploring whether Fed Chair Jerome Powell’s costly building renovations can justify his removal, escalating a fierce standoff over interest rates and Fed independence. Trump calls the $2.5 billion project wasteful, while Powell defends it as critical for safety and modernization. The conflict could have major economic and political consequences.
Quick Looks
- Trump claims Fed renovation wasteful, eyes Powell’s removal
- $2.5 billion project criticized as “ostentatious” by White House
- Powell insists upgrades are safety-driven and cost-saving
- Fed independence at stake in Trump’s push to fire Powell
- Renovation costs ballooned due to inflation and asbestos
- Supreme Court limits Trump’s power to remove Fed chair
- White House demands new planning commission approval
- Fed calls for independent inspector general review
Deep Look
Trump Targets Fed Chair Powell Over Costly Renovation, Raising Stakes for Central Bank Independence
WASHINGTON (AP) — President Donald Trump is intensifying his efforts to remove Federal Reserve Chair Jerome Powell, seizing on a ballooning renovation project at the Fed’s headquarters as a potential reason to justify Powell’s unprecedented ouster.
Trump, who has clashed with Powell for years over interest rates, said Tuesday that the Fed chair’s handling of the $2.5 billion building renovation could serve as grounds for dismissal.
“When you spend $2.5 billion on, really, a renovation, I think it’s really disgraceful,” Trump told reporters, accusing Powell of seeking a “palace” for the central bank. “I think it sort of is” grounds for firing, Trump added.
Renovation Sparks Political Showdown
The renovation in question encompasses the historic Marriner S. Eccles Building in downtown Washington and an adjacent building acquired in 2018. Originally budgeted at around $1.9 billion, costs have ballooned by roughly $600 million. The project includes critical infrastructure upgrades, asbestos removal, and modernization of aging electrical, plumbing, and communications systems in buildings that date back to the 1930s.
Fed officials stress the necessity of the renovations for safety and operational efficiency, noting that modern systems will reduce long-term costs by consolidating staff and cutting down on rented office space.
“There’s no VIP dining room. There’s no new marble. … There are no special elevators,” Powell testified last month, rejecting White House claims of “ostentatious” luxuries in the plans.
White House Claims Fed Misled Planning Officials
Russ Vought, director of the White House Office of Management and Budget, criticized the renovations in a letter to Powell, calling them extravagant and out of touch with fiscal responsibility. The White House has highlighted features like rooftop gardens and luxury finishes, though many of those elements were dropped from the final plans.
Administration officials argue the Fed’s changes to its renovation plans may have violated approvals granted by the National Capital Planning Commission (NCPC) in 2021. James Blair, a Trump appointee to the NCPC, indicated he plans to review whether the Fed should have returned for further approvals after revising its project scope.
Blair said on X that Powell’s recent congressional testimony “leads me to conclude the project is not in alignment with plans submitted to & approved by the National Capital Planning Commission in 2021.”
Fed Defends Independence, Seeks Audit
In response, the Fed insists it operates independently and is not required to follow NCPC directives, although it has done so voluntarily. The central bank said it is accountable to Congress and its independent inspector general.
Powell has requested the inspector general conduct a full review of the renovation costs to ensure transparency.
A Threat to Fed Independence
Beyond building costs, the controversy underscores Trump’s broader grievances with Powell’s economic stewardship. Trump has repeatedly demanded deep interest rate cuts to reduce government borrowing costs and stimulate economic growth—a move Powell has resisted over fears it could reignite inflation.
Under longstanding tradition and legal precedent, the Fed operates independently to shield monetary policy from political influence. Removing Powell could destabilize financial markets, undermine confidence in U.S. institutions, and potentially drive up borrowing costs if investors perceive the Fed as compromised.
Although the Supreme Court recently indicated a president cannot fire a Fed chair purely over policy disagreements, Trump could attempt to justify Powell’s removal for “cause,” alleging financial mismanagement or ethical breaches linked to the renovation.
Economic Risks Loom Large
Economists warn that any move to oust Powell could send shockwaves through financial markets and raise the cost of borrowing for both businesses and consumers.
“It’s a huge gamble,” said Andrew Levin, a former Fed staffer now at Dartmouth College, who has studied the central bank’s governance. “Firing Powell could trigger a crisis of confidence in U.S. monetary policy.”
While the renovation’s rising price tag has sparked legitimate concerns about federal spending, experts say it may not legally meet the standard of misconduct or dereliction of duty necessary to remove a sitting Fed chair.
The standoff between Trump and Powell remains one of the most dramatic tests of the Federal Reserve’s independence in modern history, with consequences that could reverberate through the economy, markets, and the 2026 political landscape.
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