Fed Chair Powell Defends $2.5B Building Renovation, Rejects Trump Allegations

Federal Reserve Chair Jerome Powell responded Thursday to recent criticism from the Trump administration, defending the central bank’s $2.5 billion renovation project as fully compliant with federal planning law.

In a written statement, Powell emphasized that the project—focused on updating two century-old buildings—remains in line with the original plan approved by the National Capital Planning Commission (NCPC) in 2021. His remarks follow accusations from the White House suggesting that deviations from the plan could violate the National Capital Planning Act.

“The project is proceeding in accordance with the plan that the NCPC approved,” Powell wrote.

Trump-Powell Tensions Escalate

The dispute adds to growing tensions between Powell and President Donald Trump, who has repeatedly pushed for interest rate cuts and criticized Powell’s economic stance. Though Trump has floated the idea of firing Powell in the past, he recently called that move “highly unlikely.”

Despite that, Trump’s team has seized on the building costs—now projected at $2.5 billion, up from the original $1.9 billion—as alleged evidence of poor management. Russell Vought, Trump’s top budget advisor, said in a letter last week that the president was “extremely troubled” by the project’s ballooning budget.

“If the plans changed, they may no longer be in compliance with the approved plan,” Vought argued.

Powell Reiterates: Renovation Is Justified and Necessary

Powell countered that the Fed only made minor design adjustments, specifically removing luxury elements to reduce costs and prevent delays. These changes, he said, did not require further approval.

The Fed chair also explained the necessity of the project:

  • Both buildings required asbestos and lead removal

  • Major systems—including electrical, HVAC, and plumbing—were outdated

  • Fire detection and suppression systems needed full replacement

“Both buildings were in need of significant structural repairs,” Powell stated.

Independence at Stake?

While Trump cannot fire Powell over policy disagreements, firing “for cause” remains a legal gray area that could further shake financial markets. Wall Street leaders and economists warn that undermining the Fed’s independence could damage investor confidence.

The Fed has also requested a watchdog review of the renovation process to ensure transparency, a move seen by some as a preemptive defense against political pressure.

Source: AP News