Construction work is carried out around the building of the Federal Reserve in Washington, DC, on September 17, 2024. The estimated cost of the project has jumped more than 30% in recent years, arousing criticism from the Trump administration and its allies.
Anna Moneymaker / Getty Images North America
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Anna Moneymaker / Getty Images North America
A makeover of several billion dollars from the offices of the Federal Reserve in Washington, DC, has become the last skirmish in a current battle between the White House and the Central Bank.
The cost of the construction project has increased from $ 1.9 billion to $ 2.5 billion in recent years. It has become a new line of attack for the Trump administration, which is already unhappy with the Fed for not having evolved more aggressively to reduce interest rates.
“The main thing is that it is the most expensive project in DC history,” Kevin Hassett, director of the National Economic Council of Administration on ABC on Sunday. “So the Fed has a lot to answer.”
The president of the Fed, Jerome Powell, was also toasted about the project by republican members of the Senate Banking Committee During a hearing last month.
“He sends the bad message to spend public money for luxury upgrades that feel more as if they belong to Palais de Versailles that a public institution, “said the chairman of the Tim Scott committee, Rs.C.
Powell defends renovations
Powell told the committee that some of the most sensational claims concerning renovation were exaggerated, while other features have been reduced.
“There is no new marble,” said Powell. “We have removed the old marble. We will give it. We will have to use a new marble where some of the old marbles have broken. But there are no special elevators. These are old elevators that have been there. There are no new characteristics of water. There are no rupids and there are no roof garden terraces.”
The Fed says that what stimulates cost overruns are unexpected developments such as excess lead and asbestos, as well as inflation which has increased the cost of building projects on a national scale.
The president of the FED, Jerome Powell, testifies before the Senate committee of Washington, DC, on June 25, 2025. Powell told the committee that some of the most sensational claims concerning the renovation are exaggerated.
Kent Nishimura / Getty Images from North America
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Kent Nishimura / Getty Images from North America
Last week, the director of the White House budget, Russell Vought, sent a letter In Powell, saying that the president was “extremely disturbed” by his management of the Fed, including the renovation.
Vought challenged the “ostentatious” elements of the project. At the same time, he suggested that leaving these characteristics at the origin of the National Commission for Capital Planning, because they were included in the plan that the Commission had approved.
Trump recently installed several Loyalists from the White House to sit on the Commission. The Fed says it is not generally subject to the management of the commission on his buildings.
Powell requests the Watchdog exam
Powell has now asked the Inspector General of the Fed to examine the project, in order to process complaints concerning the price – a decision that was Reported for the first time by Axios. But dust on the renovation of the building is only a superficial sign of the underlying tension between the administration and the central bank.
“I think it’s a slideshow,” said Fed’s long -standing look, David Wessel of the Brookings Institution last week. “It just seems to be another way in which the administration tries to make life miserable for Powell because it cannot dismiss it legally unless it can argue that it has managed things badly.”
President Trump appointed Jerome Powell to lead the Fed during his first mandate. In the photo, he shakes Powell’s hand during a press event on the appointment held at Rose Garden at the White House on November 2, 2017.
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Drew Angerer / Getty Images North America
Trump’s real beef with the president of the Fed is that Powell has not changed more aggressively to reduce interest rates.
After lowering its reference rate from a full point last year, the Fed continued to borrow the stable costs in 2025, while it tries to assess whether Trump prices and other policies will revive inflation.
The markets are betting that the Fed will again leave the unchanged prices when decision-makers will come together later this month. But a drop in rate of at least a quarter of a point is likely in September.
It is not good enough for Trump, who wants much lower rates to make the federal government cheaper to finance its debt of 36 billions of dollars.
“Our Fed rate is at least 3 points too high,” wrote Trump on social networks Last week.
New Fed leader?
Powell’s mandate as president of the Fed runs out in ten months, giving Trump the opportunity to install a more malleable leader of the Central Bank. One of the candidates for this job is the former governor of the Fed, Kevin Warsh, an ally of Trump who offered his own criticism of the Fed this weekend.
“I think what we need is a change of diet at the Fed,” Warsh told Fox News. “And it is not only the president. It is a range of people. It is a question of changing their state of mind and their models. And frankly, it is a question of breaking certain heads.”
The central bank is designed to be isolated from this type of white house pressure. If the financial markets begin to believe that the Fed takes orders from the oval office, it could lose credibility as an inflation fighter. And it could be expensive for all Americans.
