Federal Reserve Chairman Jerome Powell has formally addressed criticism from the Trump administration over the cost and transparency of the Fed’s ongoing $2.5 billion headquarters renovation in Washington, DC. In a detailed letter to Russell Vought, Director of the White House Office of Management and Budget, Powell defended the project and directed the public to a newly launched webpage designed to offer clarity and updates about the overhaul.
Vought had accused Powell of “gross mismanagement” and suggested the renovation included luxurious features such as VIP dining rooms, private elevators, and rooftop gardens. Powell dismissed these claims outright, saying, “There’s no VIP dining room. There’s no new marble, only reused or restored original materials. And there is no rooftop garden.”
What did Powell say about the construction controversy?
Powell outlined that the renovation of the Fed’s historic Marriner S Eccles Building and its adjacent facility was necessary due to serious structural concerns. These include the removal of asbestos and lead contamination, outdated HVAC systems, electrical rewiring, plumbing updates, and enhanced fire detection and suppression systems.
“These are basic upgrades to ensure safety, health, and operational effectiveness,” Powell wrote. He added that all decisions had been approved by the Fed’s Board since 2017 and were under regular scrutiny from the Fed’s Inspector General.
Originally estimated at $1.9 billion, the renovation cost has since risen to $2.5 billion. Powell attributed this to inflationary pressures, rising costs of raw materials, labour shortages, and longer construction schedules. However, the Fed chairman emphasised that changes made to the plan were designed to minimise delays and keep expenses under control, not to enhance luxury.
Contrary to accusations, Powell said removed elements such as water features and rooftop landscaping were taken out to streamline the project. He clarified that while a parking garage is being built under the lawn, this does not equate to a “roof garden,” as suggested.
Trump vs Powell
The controversy has reignited tensions between President Donald Trump and Powell. Trump has repeatedly criticised Powell for maintaining high interest rates, expressing frustration over the Fed’s monetary stance. During a press briefing, White House officials hinted the renovation could be grounds for Powell’s dismissal, though Trump later said firing him would be “highly unlikely unless he has to leave for fraud.”
Meanwhile, Vought has indicated plans to visit the Fed building site personally, and Rep. Anna Paulina Luna has called for a Justice Department investigation into whether Powell misled Congress during recent testimony.
Despite the political heat, Powell has maintained a neutral tone. “We take seriously the responsibility to be good stewards of public resources,” he wrote. Senator Mike Rounds, a Republican on the Senate Banking Committee, defended Powell, noting the importance of Fed independence: “It really is best… that the markets understand the Fed is independent.”