Trump Pressures Fed Over $2.5 Billion Renovation Project
Federal Reserve Chair Jerome Powell has requested an internal investigation into the escalating costs of renovating the Fed’s historic headquarters in Washington, D.C. The move comes as the Trump administration intensifies criticism of the central bank’s leadership and spending.
The renovation in question covers the nearly 100-year-old Marriner S. Eccles building and an adjacent property on Constitution Avenue. Initially projected at a lower cost, the project’s budget has grown to $2.5 billion, prompting a formal letter of concern from Russell Vought, Director of the Office of Management and Budget (OMB), who said President Donald Trump was “extremely troubled” by the overruns.
Powell Responds as Oversight Questions Mount
In response to these concerns, Powell asked the Fed’s independent Inspector General, Michael Horowitz, to review the project. The Inspector General had already been monitoring the renovations, but Powell’s request signals a shift to publicly address political pressure from the White House.
While the OMB has no legal authority over the Federal Reserve — which operates independently from the Congressional budget process — the letter represents a direct escalation in tensions. Trump has repeatedly clashed with Powell over monetary policy and interest rates, and this latest episode adds fuel to the ongoing dispute.
During a recent congressional hearing, Powell defended the project and clarified key details, pushing back against media claims and political rhetoric. He emphasized that no private elevators or exclusive dining rooms are being installed for officials, contrary to rumors.
Fed’s Autonomy and Historical Significance at Stake
The Fed’s authority to manage its properties is enshrined in the Federal Reserve Act, which grants the Board of Governors full control, subject only to oversight by Congress and the Fed’s Inspector General. Powell’s leadership — originally appointed by Trump in 2017 and reappointed by President Biden — remains under political scrutiny, though the law prevents the president from removing the Fed chair over policy disagreements.
The Eccles building, built during the Roosevelt administration, has long been a symbol of the Fed’s institutional presence. Its restoration, along with the neighboring building at 1951 Constitution Avenue (transferred to the Fed by the Trump administration in 2018), was positioned as a cost-saving move to consolidate leased spaces and increase government efficiency.
A statement at the time from the General Services Administration praised the transfer for putting “a vacant building back in productive use” and offering long-term savings for taxpayers. However, as costs have climbed, that narrative has been challenged by renewed scrutiny from Trump’s team.
Political Overtones and Inflation Concerns Collide
Trump’s broader frustration with the Fed extends beyond the building renovation. He has repeatedly pressured Powell to cut interest rates more aggressively, especially as tariffs and trade policies reshape inflation dynamics. Fed officials have resisted such pressure, insisting on more clarity regarding the inflationary impact of tariffs before taking action.
The latest dispute reflects deeper tensions about the Fed’s role in shaping monetary policy independently from the executive branch. Powell’s term runs through May 15, and he has made clear he intends to serve the full term despite political headwinds.
