Fed Chairman Powell Defends Headquarters Renovation Amid White House Criticism

Federal Reserve Chairman Jerome Powell has responded to criticism from the White House regarding renovations to the Fed’s headquarters in Washington D.C. In a detailed letter to White House budget director Russ Vought, Powell defended the project, emphasizing that all work adheres to historic preservation and accessibility standards. The exchange underscores the escalating tensions between Powell and President Trump, who has been advocating for rate cuts and has even threatened to remove Powell from his position despite the Fed’s independence.

Powell’s response came after Vought publicly criticized the Fed’s renovation plans, describing them as extravagant and questioning the necessity of certain features. Vought’s letter to Powell highlighted the president’s displeasure with the Fed’s management, particularly the “ostentatious overhaul” of its headquarters. Despite the Fed’s autonomy in making decisions about its office buildings, Powell chose to address Vought’s concerns point by point.

Vought’s questions covered a range of topics, including the status of rooftop garden terraces, private dining rooms, elevators, and water features. Powell clarified that the project involves the renovation of two historic buildings on the National Mall, which were constructed in the 1930s and have not undergone comprehensive renovations since their initial construction. The work includes removing asbestos and lead contamination to ensure the buildings are safe and healthy work environments.

Powell also confirmed that the project is proceeding in accordance with plans approved by the National Capital Planning Commission in 2021. A new public section on the Fed’s website has been created to provide transparency about the project’s history, goals, engagement with state and federal entities, cost drivers, and specific features. This move aligns with the Fed’s commitment to transparency and accountability.

Regarding specific features, Powell clarified that there were no plans for “VIP elevators.” Instead, existing elevators are being remodeled to improve accessibility for people with disabilities. The “VIP dining rooms” mentioned by Vought are actually existing conference rooms that can be used for meetings and are being renovated and preserved. The “rooftop garden terrace” is a ground-level lawn built on the roof of an underground parking lot, a common feature used by various federal agencies. Water features in the Constitution Building have been scrapped, while existing fountains in the Eccles Building are being restored. The stonework is being restored using original materials or similar replacements to adhere to historic preservation guidelines.

Vought had raised concerns about the budget overruns, noting that $700 million had already been spent. Powell confirmed that the budget has been subject to Fed board approval each year and that the Fed has the legal authority to levy its own budget surpluses to handle expenditures. This exchange highlights the unusual level of interest the White House is taking in the federally mandated central bank, marking a potential escalation in the ongoing battle between the Oval Office and the Federal Open Market Committee.

President Trump has been pushing for rate cuts since winning the 2024 election, criticizing Powell for not lowering rates to a more normalized level. However, Powell and the FOMC have unanimously voted to keep the base rate at its current position, citing concerns about Trump’s tariff agenda and its potential impact on the Fed’s dual mandate of maintaining inflation at 2%. Despite Powell’s resistance to White House pressure, Trump has threatened to fire the chairman before the end of his term in 2026, although he later walked back this comment. This week, Trump confirmed discussions with lawmakers about the legitimacy of dismissing Powell from his role, further intensifying the conflict between the two branches of government.