Fed Building Renovation Gives Trump New Opening to Attack Powell

By Andrew Ackerman / The Washington Post

12:13 JST, July 12, 2025

The Trump administration has escalated its campaign against Federal Reserve Chair Jerome H. Powell, laying out a new set of arguments aimed at the potential ouster of the central bank leader.

Administration officials alleged the Fed chairman either lied to Congress about a multiyear renovation to the central bank’s offices or grossly mismanaged the endeavor. The criticism comes as the president pushes aggressively for lower interest rates, pressure that Powell and the Fed have largely ignored as they wait to see how Trump’s trade and other policies weigh on the economy.

Asked by reporters on Friday if he would try to fire Powell, Trump said no. But he said the Fed chair was doing a “terrible job” and said that interest rates should be three percentage points lower.

Trump’s comments came after the White House budget office on Thursday attacked Powell over the costs of a long-running renovation project, which aims to create a modern campus for the Fed involving three buildings overlooking the National Mall in Washington. The price tag for the project swelled to nearly $2.5 billion, up from an estimate of $1.9 billion before the pandemic, which triggered a jump in the price of steel, cement and other materials, the Fed has said.

Russell Vought, director of the White House Office of Management and Budget, said Friday that the National Capital Planning Commission would probe the matter, after the president installed three White House advisers on its board, including Deputy Chief of Staff James Blair. The commission plays a key role in reviewing building proposals for federal property in the region and had previously signed off the renovations.

Vought, in a letter released Thursday, suggested Powell either misled Congress or didn’t seek appropriate approval from the planning commission after scaling back aspects of the renovations.

Powell told lawmakers that features such as beehives and VIP dining rooms are no longer part of the plans for the renovations. A Fed official said Powell was honest in his congressional testimony. The Fed’s external building manager never indicated that any of the proposed changes required resubmission, the official said.

The increased pressure from the Trump administration prompted the Fed on Friday to release an updated FAQ about the project and its justification, which revolve around modernizing decades-old structures that required complete gut jobs. Much of the work is also underground, adding to the costs. Congress has generally given the Fed wide latitude to maintain, enlarge or remodel any of its buildings.

The massive construction project had largely flown under the radar until recent weeks, when Sen. Tim Scott (R-South Carolina), the Senate Banking Committee chairman, pressed Powell on the plans. The pushback is notable in a city where agency renovations often draw sharp congressional criticism. About a decade ago, for instance, Republican lawmakers slammed the $145 million overhaul of the Consumer Financial Protection Bureau’s brutalist-style headquarters near the White House.

Fed watchers say the current criticism reflects a thinly-veiled effort to add to the pressure campaign against the Fed. It could also mark the laying of new scaffolding to create a legal justification for Powell’s removal, they said. The Supreme Court signaled recently that Trump couldn’t fire Powell over a policy dispute such as interest rate policy, but only for cause, generally interpreted to mean some form of malfeasance or dereliction of duty.

No mainstream economist maintains there is any need for a sudden and significant drop in U.S. borrowing costs, at a time when the economy remains in good shape.

Central banks typically don’t dramatically slash rates outside of an emergency. After cutting rates by a full percentage point between September and December, the Fed is in an extended pause mode. It isn’t expected to resume its rate cuts until September at the earliest, fueling animosity from the White House.

Still, the attacks appear to have resonated within the conservative ecosystem, amplified by current and former officials. William J. Pulte, the federal overseer of government-controlled mortgage giants Fannie Mae and Freddie Mac, has spent days attacking Powell on social media, repeating Trump’s calls for the Fed chief to step down.

On Friday, Pulte issued a false statement that Powell was considering resigning, citing unnamed “reports.” A spokesman didn’t respond when asked by a reporter to identify those reports.

Powell has stated repeatedly he has no plans to leave early. His term as Fed chairman expires in May but he can remain on the Fed’s seven-member board of governors until 2028.