Washington (AP) – President Donald Trump has renewed his push to remove Federal Reserve Chair Jerome Powell, this time seizing on the central bank’s $2.5 billion renovation project as justification.
The long-running project, which dates back to Trump’s first term, has only recently drawn serious scrutiny from the White House. Now, Trump is accusing Powell of mismanaging the costly overhaul of two Fed buildings in Washington—and possibly misleading Congress about it.
“When you’re spending $2.5 billion on what is essentially a renovation, it’s disgraceful,” Trump said Tuesday. “I never saw the Fed chair as someone who needed a palace.”
Trump, who has clashed with Powell over interest rates and inflation policy, suggested that the renovations may serve as cause for firing the Fed chief before his term expires in May 2026—an unprecedented and legally fraught move that could upend the central bank’s independence.
Powell, appointed during Trump’s first term, has long resisted political pressure to slash interest rates, arguing that premature cuts could worsen inflation and lead to higher long-term borrowing costs.
Independence at Risk
The Federal Reserve’s independence from presidential control has been a pillar of U.S. financial stability. While presidents nominate Fed officials, they are not permitted to fire them without cause—defined as misconduct or dereliction of duty. Disagreements over policy are not sufficient grounds.
Still, the Trump administration is suggesting that Powell’s handling of the renovation qualifies. Officials claim Powell misrepresented elements of the project during recent congressional testimony and allege violations in the project’s approval process.
Inside the Renovation
The renovation centers on the Marriner S. Eccles building, the Fed’s main headquarters, which dates back to the 1930s. Its aging electrical, plumbing, and HVAC systems are being replaced, and hazardous materials like asbestos and lead are being removed. A nearby building purchased by the Fed in 2018 is also undergoing updates.
The Fed argues that the upgrades will ultimately save taxpayer money by consolidating its 3,000 Washington-based employees and reducing the need for leased office space. However, the project’s cost has ballooned by about $600 million, due in part to rising construction costs and additional hazardous material removal.
A planned renovation of a third building was scrapped in 2024 because of budget overruns.
Trump Officials: Lavish Spending, Ethical Breach
White House budget chief Russ Vought sent Powell a letter expressing Trump’s frustration over what he called an “ostentatious overhaul.” He cited alleged design features such as rooftop gardens, VIP dining areas, and marble finishes.
Powell firmly denied those claims during a Senate hearing last month. “There’s no VIP dining room. There’s no new marble. No rooftop terraces. No special elevators,” he said, adding that some features were removed from the initial plans back in 2021.
Still, the White House claims the Fed altered its plans without seeking new approval from the National Capital Planning Commission (NCPC), which initially signed off on the project. Trump’s deputy chief of staff James Blair, who sits on the NCPC, said Powell’s June testimony raised red flags.
Blair has pledged to tour the construction site and review documentation to assess whether the Fed violated its agreement with the commission. However, the central bank maintains it voluntarily worked with the NCPC and is not legally bound by its authority. Instead, the Fed says it reports to Congress and an independent inspector general.
Powell on Defense
While Powell has defended the renovations as necessary and mischaracterized by critics, the controversy may serve Trump’s broader effort to tighten control over the Fed ahead of the 2026 election. Legal experts note that firing Powell would be a direct challenge to the principle of central bank independence and could shake investor confidence in U.S. markets.
A recent CNN/SSRS poll showed only 3% of Americans are satisfied with how much information the government has released about the Fed renovation. Among Republicans, 40% expressed dissatisfaction, as did over half of independent voters.
The project, originally intended to modernize and streamline Fed operations, has now become the latest political flashpoint in Trump’s war on what he calls “the deep state bureaucracy.”
