Federal Reserve Chair Jerome Powell has defended the central bank’s $2.5 billion renovation project for its headquarters in a detailed letter addressed to Russ Vought, Director of the White House Office of Management and Budget. In the correspondence, Powell asserts that the Federal Reserve has adhered to all applicable protocols and legal requirements, emphasizing the institution’s role as a responsible steward of public resources while executing necessary infrastructure upgrades.
The project, which involves the historic Marriner S. Eccles Building in Washington, D.C., encompasses structural repairs, the removal of hazardous materials such as asbestos and lead, and the replacement of outdated systems, including electrical, plumbing, heating, ventilation, air conditioning, and fire safety mechanisms. Approved in 2017, the renovation’s costs have risen from an initial estimate of $1.9 billion to $2.5 billion, attributed to raw materials and labor inflation, supply chain disruptions, and extended use of leased spaces due to construction delays. Powell clarified that design changes were implemented to simplify the process and mitigate further cost escalations, including eliminating proposed features such as water elements and rooftop gardens, with no additions like VIP dining facilities or beehives. He further noted voluntary collaboration with the National Capital Planning Commission, despite the Federal Reserve not being subject to its mandatory oversight, and affirmed that modifications did not require additional formal reviews as they were not deemed substantial.
This defense responds to pointed criticisms from the White House, where Vought accused Powell of mismanagement, non-compliance with oversight regulations, and potentially misleading Congress regarding the project’s scope and expenses. Vought’s letter, posted publicly, expressed President Trump’s deep concerns and demanded a response within seven business days, framing the renovation as an “ostentatious overhaul” that could warrant accountability measures. President Trump described the expenditure as “disgraceful” and suggested it might constitute grounds for dismissal. However, he later indicated it was “highly unlikely” he would pursue Powell’s removal absent evidence of fraud. These exchanges occur amid broader tensions between the Trump administration and the Federal Reserve, including disagreements over monetary policy, interest rate decisions, and discussions about the central bank’s independence. Additionally, Representative Anna Paulina Luna has raised the possibility of criminal charges against Powell for allegedly providing misleading testimony to Congress on the matter.
As of July 18, 2025, the renovation remains under construction, with the Federal Reserve maintaining that it has exercised diligent oversight through its board and internal watchdog to ensure fiscal prudence and regulatory adherence.
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