Fed Renovation Costs Surge 100% to $2.5 Billion Amid Political Tensions

The renovation of the Federal Reserve's headquarters in Washington has become a point of contention, with Donald Trump using the project's cost and design choices as grounds to criticize Fed Chair Jerome Powell. The extensive use of marble in the building's facade, which Trump has cited as an example of extravagance, was partly influenced by Trump's own appointees to a local commission.

During the planning stages of the renovation, the Fed's architects proposed glass walls to symbolize the institution's transparency. However, three Trump appointees to the Commission of Fine Arts advocated for more "white Georgia marble" to better align with the building's historic character. While most of the proposed glass exterior was retained, some marble was added as a result of the commission's input.

The use of marble does not fully account for the project's cost overruns, which now total approximately $2.5 billion. However, it does complicate the White House's efforts to portray Powell as a profligate spender, potentially using the renovation as a pretext for his removal. The National Capital Planning Commission has initiated an inquiry into Powell's oversight of the updates, with White House spokesman Kush Desai stating that the Fed's leadership should be held accountable for the mismanagement of taxpayer dollars.

The dispute over the renovation's costs and design choices has raised concerns about the potential politicization of the Fed. Trump has argued for lower interest rates, while Powell and other Fed committee members have been cautious, waiting to see the effects of Trump's tariffs on inflation. The possibility of Trump attempting to dismiss Powell before the end of his term has sparked fears of financial market instability and higher interest rates on U.S. debt and mortgages.

The Commission of Fine Arts reviewed the renovation plans three times in 2020. Duncan Stroik, a Trump appointee, proposed an amendment requesting an alternative design in white Georgia marble, citing the material's use in nearby historic buildings. While Stroik's amendment was voted down, the commission did not fully endorse the Fed's plans, leading to further revisions that included marble panels.

The discussions within the commission became more contentious after several members were replaced with Trump appointees who favored classical architecture. The commission did not fully approve the Fed's project until September 2021, after some of Trump's appointees had been removed by then President Joe Biden. The use of marble in the renovation has become a symbol of the broader debate over the Fed's independence and the potential for political interference in its decision-making processes.