- Trump pressures Fed’s Powell on rate cuts amid costly $2.5B Fed building renovation overruns.
- Fed denies wrongdoing as renovation costs rise due to inflation, security, and delays.
- Renovation ongoing, completion set for 2027; Fed asserts independent budget and oversight compliance.
President Donald Trump publicly addressed Federal Reserve Chair Jerome Powell during a visit to the Fed’s Washington headquarters, intensifying ongoing tensions over monetary policy and the Federal Reserve’s costly building renovation project.
During the tour of the Fed’s renovation site, Trump offered a figure exceeding $3 billion for the project, a number Powell contested. Powell clarified that it included a third Fed building refurbished years earlier. Powell stated that the third building was completed in 2021, separate from the current $2.5 billion renovation.
The project involves refurbishing the historic Marriner S. Eccles building and the Constitution Avenue building, both nearly a century old and listed on national historic registries. The renovation has faced large cost overruns, rising from an original estimate of $1.9 billion to $2.5 billion due to inflation, supply chain delays, tariffs, and increased labor expenses.
Security upgrades, including blast-resistant windows and structural upgrades, contributed to the budget increase. Despite scaled-back plans to contain costs, the project timeline has extended with completion expected by fall 2027, and full occupancy targeted for March 2028.
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Political Pressure and Interest Rate Demands
Trump has openly criticized Powell’s handling of monetary policy, especially regarding interest rates. Standing beside Powell, Trump told reporters he would “love” for the Fed chair to lower rates, a move Powell and the Fed have resisted amid economic uncertainties tied to trade tariffs.
Trump’s criticisms intensified as his administration pointed out the renovation’s cost overruns as a potential justification for Powell’s dismissal. White House Budget Director Russell Vought accused Powell of violating oversight rules during the project’s execution. However, Powell denied any wrongdoing, stating the Fed operates independently and complies with oversight on a voluntary basis.
Fed Oversight and Project Management
Powell acknowledged the buildings required extensive updates, including the removal of hazardous materials and the replacement of outdated infrastructure systems. The Fed has its budget and rules separate from the federal government, complicating oversight by external agencies such as the National Capital Planning Commission (NCPC).
Powell dismissed claims that recent changes to the renovation plans required additional review, describing them as efforts to simplify construction and prevent further delays. The Fed has initiated a second review by its inspector general to ensure proper project management.
Related: US Lawmaker Claims Jerome Powell Will Be Sacked: The Search for a New Fed Chair Is On
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