The Trump administration’s public attacks on Federal Reserve Chair Jerome Powell elicited a low-key response from the Fed over the weekend: A Q&A detailing the history of a $2.5 billion renovation project that’s become the focal point of the administration’s attempts to oust Powell.
While the Fed’s response was low-key, it also provided a point-by-point rebuttal of allegations by Trump administration officials that the project has been mismanaged — and that Powell lied to Congress about its specifics.
Federal Housing Finance Agency Director Bill Pulte — who’s led the administration’s attacks on Powell — dismissed the Fed’s response as “nonsense” that “reek of a coverup by Jerome Powell” in a post on X Monday.
Powell has also asked Federal Reserve Inspector General Michael Horowitz to view the project’s cost “and any other related matters Horowitz deems appropriate,” Axios reported Monday, citing an anonymous source.
Axios’ report was confirmed by Politico, which said Powell informed Senate Banking Committee leaders Sen. Tim Scott (R-S.C.) and Sen. Elizabeth Warren (D-Mass.) of the move in writing.
Powell has been under attack for months by Trump administration officials frustrated that the Fed hasn’t lowered interest rates this year. Fed officials say they’re waiting to see how the economy reacts to the administration’s policies on tariffs, taxes, immigration and regulation.
In a May 22 order, the Supreme Court reiterated that Trump — who appointed Powell as Fed chair in 2017 — can’t remove him without cause.
Trump and his allies have focused on pressuring Powell to resign, but the Fed chair has made it clear he intends to stay until his term expires in May.
More recent allegations that the Fed has mismanaged the renovation of its Washington, D.C. headquarters appear to be aimed at providing a mechanism for unseating Powell as Fed chair before then.
The Fed has been modernizing two downtown office complexes — the Marriner S. Eccles Building and the Federal Reserve East Building at 1951 Constitution Avenue — while most staffers continue to work out of a building that was upgraded in 2021.
Federal Reserve headquarters renovation project
Marriner S. Eccles Building and Federal Reserve Board-East Building. Source: National Capital Planning Commission (NCPC).
Pulte, the Trump administration’s pick to head the federal regulator overseeing Fannie Mae and Freddie Mac, has seized on an April 27 New York Post story that detailed lavish-sounding features of the project. The story quoted a Dartmouth economics professor who called the Fed’s headquarters “the Palace of Versailles on the National Mall.”
When Powell delivered the central bank’s Semiannual Monetary Policy Report to Congress last month, he denied that the project included features like a VIP dining room, special elevators, new water features, beehives or rooftop terrace gardens.
Pulte accused Powell of lying to Congress.
“I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed ‘for cause,'” Pulte said in a July 2 post on the social media platform X.
White House official Russell Vought upped the ante on July 10, posing 11 questions to Powell about the renovation project and giving him seven business days to answer.
Vought — a Project 2025 co-author who heads both the White House Office of Management and Budget (OMB) and the Consumer Financial Projection Bureau (CFPB) — suggested that Powell broke the law if some controversial features of the project had been cancelled.
The National Capital Planning Act, Vought claimed, “requires that projects like the Fed headquarters renovation be approved by the National Capital Planning Commission.”
The night before, on July 9, the Trump administration had ousted several members of the National Capital Planning Commission (NCPC), with an aide to Vought and other White House staffers taking their places, Politico later reported.
But according to the FAQ on the renovation project published by the Fed on Friday and updated over the weekend, Powell has little reason to worry about the NCPC.
Fed officials say they “voluntarily submitted project designs” to the NCPC and received approvals in 2020 and 2021.
Such reviews are “advisory only and do not extend to review of project funding,” and changes made since then did not merit further review, the Fed maintains.
First approved by the Fed in 2017, the project’s expected cost had already swelled from $1.9 billion to $2.5 billion in 2023, when The Wall Street Journal ran a lengthy article on the project’s cost overruns.
Beginning in 2023, “a small number of design changes” were made “to remove certain elements and added no new elements,” Fed officials maintain. “These changes were intended to simplify and hasten the remaining construction, decrease complexity, and reduce the possibility of further cost overruns and delays.”
Key factors in the cost increases have included:
- Changes to the design mandated by review agencies
- Rising costs of materials, equipment, and labor
- Unforeseen conditions like asbestos, toxic soil contamination, a higher-than-expected water table
There are no new VIP dining rooms, VIP elevator, beehives or rooftop terrace gardens, the Fed said, confirming what Powell told Congress on June 25.
Although the original design included new water features for 1951 Constitution Avenue, “they have been eliminated. Fountains that were original to the Eccles Building are being restored,” Fed officials said.
Citing planning documents, the New York Post had reported that the renovations would include “rooftop garden terraces” and “Georgian white marble.”
But both buildings “were originally built with marble in the façades and stonework,” Fed officials said. “The project has salvaged the original exterior marble to be reinstalled and will use new domestic marble where the original was damaged or where needed to keep with historic preservation guidelines and to address concerns raised by external review agencies.”
The “garden terrace” in the 2021 plan “refers to the ground-level front lawn of 1951 Constitution Avenue, which serves as the roof of the parking structure beneath,” while references to “vegetated roofs” describe green roofs “commonly used to help with stormwater management and to increase building efficiency and roof longevity.”
The Fed’s Office of Inspector General “has had full access to the project information on costs, contracts, schedules, and expenditures ” and conducted an audit in 2021 to assess the Fed’s process for planning and managing multiple renovation projects.
In the long run, Fed officials expect the project — which also includes major structural work to bring the buildings up to code, and replacement of antiquated electrical, plumbing and heating and air conditioning systems — will save money.
“The project will reduce costs over time by allowing the Board to consolidate most of its operations,” Fed officials said. “It involves a complete overhaul and modernization that preserves two historic buildings that have not been comprehensively renovated since their construction in the 1930s.”
Representatives for Pulte and Vought did not respond to Inman’s request for comment.
Editor’s note: This story has been updated to correct that new members of the National Capital Planning Commission (NCPC) include an aide to Russsell Vought, not Vought himself. The three new NCPC members appointed by President Tump on July 9 are White House Secretary William Scharf, White House Deputy Chief of Staff Michael James Blair, and OMB Associate Director Stuart Levenbach.
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