President Donald Trump has intensified his campaign to remove Federal Reserve Chair Jerome Powell, seizing on the central bank’s $2.5 billion headquarters renovation as potential grounds for dismissal. The move follows months of Trump’s frustration over Powell’s refusal to slash interest rates, citing risks of inflation from the administration’s tariff policies. Trump called the renovation costs “disgraceful,” accusing Powell of mismanaging funds and misleading Congress, potentially justifying removal “for cause.”
The renovation of the Fed’s Marriner S. Eccles building and an adjacent property, approved in 2017, aims to modernize 1930s-era infrastructure, removing asbestos and upgrading electrical, plumbing, and HVAC systems. Initially budgeted at $1.9 billion in 2019, costs ballooned by $600 million due to post-pandemic material and labor price surges and unexpected asbestos removal. The Fed insists the project will save money long-term by consolidating its 3,000 Washington-based employees, reducing leased space.
Trump’s allies, including Office of Management and Budget Director Russell Vought, have labeled the project “ostentatious,” alleging plans for lavish features like rooftop gardens and VIP dining rooms. Vought’s letter to Powell on July 10 questioned compliance with the National Capital Planning Act, claiming unapproved changes to the 2021 plans. Powell refuted these claims in June Senate testimony, denying new marble, special elevators, or rooftop gardens, noting that such elements were scaled back to curb costs.
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The White House argues that these changes required fresh approval from the National Capital Planning Commission (NCPC), where Trump recently appointed loyalists, including Deputy Chief of Staff James Blair. Blair, on X, suggested Powell’s testimony misaligned with NCPC-approved plans, hinting at legal violations. However, the Fed maintains it isn’t subject to NCPC oversight and answers to Congress and its inspector general. Powell requested an independent review by Inspector General Michael Horowitz to examine the project’s costs and management.
Critics, including former Fed Governor Kevin Warsh and Federal Housing Finance Agency Director Bill Pulte, have amplified the attack, with Pulte falsely claiming Powell considered resigning. Warsh, a potential Powell successor, called the costs “outrageous” on Fox News. Legal experts, however, caution that firing Powell for cause—requiring proof of misconduct or dereliction—faces high hurdles, especially after a Supreme Court ruling protecting Fed independence.
Trump’s push risks destabilizing markets, as Powell’s ouster could erode the Fed’s autonomy, potentially spiking inflation and interest rates. While Trump insists rate cuts would ease government borrowing, Powell warns premature cuts could exacerbate economic instability. With Powell’s chair term ending in May 2026, the renovation dispute may be a pretext to pressure his early exit, though legal and market barriers remain formidable.
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