[Report by Ouanchao Wang, Observatorist Network] Previously, President Donald Trump and his allies had repeatedly criticized Federal Reserve Chairman Jerome Powell. Now, they have found a new reason to criticize him—his handling of the expensive renovation project at the Fed headquarters building.
According to a report by Bloomberg on July 12th, local time, this renovation project is the most clear example so far, indicating that Trump and his circle are seeking every opportunity to scrutinize Powell’s leadership within the Fed, even surpassing his economic management duties. Some government officials seem to be constructing an argument that the renovation project provided Trump with an opportunity to meet the high legal threshold required to remove Powell as the chairman of the Fed.
As the pressure intensifies, Trump continues to demand interest rate cuts from the Fed while Powell and other policymakers have consistently refused to compromise this year. Trump then fiercely criticized the Fed chairman multiple times and explicitly stated that he would appoint someone supportive of interest rate cuts to replace Powell when his term as the Fed chairman ends in May next year.
In recent days, officials from the Trump administration and some Republican members of Congress have focused on the renovation project, questioning its rising costs, their so-called “luxury design,” and Powell’s recent testimony about the construction project in Congress.
Bill Pulte, the head of the Federal Housing Finance Agency (FHFA), who strongly criticized Powell’s interest rate policies and also attacked him over the renovation project, claimed that Powell made false statements about the project details during a Senate hearing on June 25th. He asserted that these statements constituted “just cause” for removing Powell’s position, and called on Congress to investigate. However, Pulte did not provide specific details.
On July 11th, local time, Pulte, who also serves as the chairman of Fannie Mae and Freddie Mac, released a statement through the FHFA’s official website. The full text of the statement only included one sentence: “Reports that Jerome Powell is considering resignation are encouraging to me. I believe this decision is correct for the United States, with the economy poised for robust growth.”
The Federal Reserve’s budget document shows that compared to $1.9 billion in 2023, the cost estimate for this renovation project has risen to $2.5 billion this year. The Fed’s 2025 budget report states: “Due to factors related to bidding, the construction cost estimates continue to increase, especially in the areas of mechanical, electrical, and plumbing engineering.”
However, critics of Powell have been closely monitoring the rising costs, while multiple media outlets have described some design features of the renovation project as “luxurious extravagance.”
In a letter to Powell dated July 10th, local time, Roger Vought, the Director of the Office of the White House Chief Financial Officer, criticized the project and requested more details from Powell.
Vought stated in a post on social media: “You did not attempt to correct the Federal Reserve’s fiscal condition but continued to pursue a lavish renovation of the Washington D.C. headquarters.” In the post, Vought also asserted that Powell had “seriously mismanaged” the Federal Reserve.
In his letter to Powell, Vought indicated that Powell’s testimony raised “serious issues,” specifically whether the renovation project complies with relevant building laws. He wrote: “While minor deviations from the approved plan may be inevitable, your testimony seems to indicate that the main design elements of the project do not align with the approved plan.”
The document published by the National Capital Planning Commission (NCPC) in 2021, which reviews federal agency construction projects such as the Federal Reserve, is the latest comprehensive review report on the renovation project.
Federal Reserve officials have stated that external architectural and engineering firms have never recommended the need to resubmit the modification proposal for approval by the committee.
It is noteworthy that Trump has recently appointed three White House officials to serve in the NCPC. Among them, James Blair, the Deputy Chief of Staff at the White House Office, recently declared on social media that he would immediately request a review of the project and conduct field inspections.
He wrote: “As the Federal Reserve faces operational deficits, high interest rates, and heightened public scrutiny, it is undeniable that the so-called ‘Taj Mahal near the National Mall’ project (the so-called ‘Taj Mahal near the National Mall’ project) does not align with the best interests of the Associated Press Council and its constituents.”
The Federal Reserve has stated that the purpose of renovating two historical buildings at its Washington headquarters is to integrate operations to reduce costs.
Powell and the Federal Reserve are attempting to counter criticisms against the renovation project. On July 11th local time, the Federal Reserve added a “Frequently Asked Questions” page on its website regarding the project, explaining the reasons for the cost increase and refuting design features criticized by critics.
“The Federal Reserve is earnestly fulfilling its responsibility as a good manager of public resources,” the webpage states. An official from the Federal Reserve mentioned that Powell was honest during his discussion of the project at last month’s Senate Bank Committee hearing.