White House Intensifies Pressure on Fed Chair Powell Over $2.5 Billion Renovation Costs

Federal Reserve Chair Jerome Powell is facing escalating attacks from the White House over alleged mismanagement of a years-long, multi-billion dollar renovation of the Fed’s headquarters. The White House, under President Donald Trump, has openly suggested that the spiraling costs could be grounds for Powell’s dismissal, even as experts question the legality of such a move.

The renovation project, initiated in 2017 before Powell’s appointment, has seen its projected cost balloon from $2.1 billion to $2.5 billion. White House Budget Director Russell Vought has publicly criticized Powell’s handling of the project, demanding answers and a site visit, while President Trump has recently replaced several key appointees on the National Capital Planning Commission, which oversees D.C. construction.

In response to the scrutiny, Powell has defended the cost increases, citing unforeseen challenges such as extensive asbestos, toxic soil contamination, and the inherent complexities of renovating historic buildings on the National Mall. He emphasized that the project includes essential infrastructure upgrades and aims to centralize the Fed’s workforce, ultimately reducing long-term leasing costs. Powell also announced this week that he has requested the Federal Reserve Board’s inspector general to review the project and its budget.

While the White House frames the issue as fiscal irresponsibility, many observers, including University of Pennsylvania professor Peter Conti-Brown, view the renovation controversy as a pretext for President Trump’s long-standing frustration with Powell’s monetary policy, particularly the Fed’s stance on interest rates. Legal scholars indicate that budget overruns are unlikely to constitute sufficient ’cause’ for removing a Fed chair, a position protected to ensure independence.

The Federal Reserve is self-financed through its operations and does not directly rely on taxpayer funds. Despite the escalating rhetoric, President Trump recently indicated he was ‘highly unlikely’ to fire Powell, though the pressure from his administration continues to mount.

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