Standing side-by-side during a tour of the Federal Reserve’s ongoing renovation, President Donald Trump and Fed Chair Jerome Powell clashed publicly over the ballooning cost of the project—further intensifying the already strained relationship between the two.
During the televised visit, Trump sharply criticized the price tag of the renovations, claiming the cost had surged to $3 billion. Powell, visibly taken aback and wearing a hard hat, immediately pushed back, shaking his head and saying, “I’m not aware of that.” Trump then handed him a sheet of paper, insisting, “It just came out.”
Powell replied dryly, “You’re including the Martin renovation. You just added in a third building.”
To which Trump shot back, “It’s a building that’s being built.” Powell quickly corrected him, noting, “It was built five years ago.”
Why This Matters
The exchange highlighted deepening tensions between the president and the Fed chairman—tensions that could have far-reaching consequences for U.S. economic policy and market stability. Trump has floated the possibility of removing Powell before his term expires in May, though he acknowledged such a move is “highly unlikely.” Nonetheless, any effort to oust Powell could trigger concern among investors, economists warn.
What’s Behind the Dispute
The renovations—centered on the Marriner S. Eccles building and other Federal Reserve properties—were originally budgeted at $1.9 billion, but unexpected expenses, including asbestos removal and rising construction costs, have driven the price up by roughly $600 million. The Fed now estimates the total cost will surpass $2.5 billion.
In response to the controversy, Powell has called for the Fed’s independent inspector general to review the project, citing the need for transparency.
Meanwhile, Newsweek reached out to the Federal Reserve Board of Governors for further comment.
Trump: Powell One of My “Worst Appointments”
The president has intensified his criticism of Powell, particularly over high interest rates, which he blames for dragging down the housing market and stalling economic growth.
“He is truly one of my worst appointments,” Trump wrote on Truth Social earlier this month. “Too Late and the Fed are choking out the housing market with their high rate… The USA is rockin’, there is VERY LOW INFLATION, and we deserve to be at 1%, saving One Trillion Dollars a year on Interest Costs.”
Trump also took aim at President Biden, noting that it was “Sleepy Joe” who reappointed Powell.
Political and Public Reactions
Senator Rick Scott (R-FL) echoed Trump’s frustration in a post on X (formerly Twitter):
“Jay Powell has completely mismanaged the Federal Reserve at the expense of hardworking Americans. To make matters worse, he’s focusing on a $2.5B luxury HQ renovation project instead of fixing the mess he and the Biden admin created.”
The Fed, in a Q&A published on its website, blamed the cost overruns on:
- Changes to building designs following agency consultations
- Increases in materials and labor prices
- Unforeseen issues like widespread asbestos, soil contamination, and a higher-than-expected water table
Trump Touts His Own Construction Record
Later on Thursday, Trump took to Truth Social once again, noting:
“It was a Great Honor to tour the Renovation (and some new Construction!) of the Federal Reserve Building… It would have been much better if it were never started. The cost overruns are substantial, but, on the positive side, our Country is doing very well and can afford just about anything — Even the cost of this building! I’ll be watching and, hopefully, adding some expertise.”
Trump went on to contrast the Fed’s project with his own success renovating the Old Post Office in Washington, D.C., which he said was done at a fraction of the cost and on a much larger scale.
What’s Next
Despite Trump’s repeated attacks, removing Powell remains legally and politically complex. The Fed chair can only be dismissed “for cause”—such as serious misconduct—not over policy disagreements or project mismanagement.
Still, the public showdown has sparked renewed debate over the limits of presidential power when it comes to the independence of the Federal Reserve—just as Trump continues pushing for a 3-point rate cut ahead of the 2026 election season.
