White House Accuses Powell of 700 Million Dollar Renovation Overspending

The White House has expanded its criticism of Federal Reserve Chairman Jerome Powell, shifting focus from interest rate policies to allegations of mismanagement in a lavish renovation project at the Federal Reserve's headquarters. The Office of Management and Budget Director, a close ally of President Trump, accused Powell of overseeing a renovation that exceeded its budget by 700 million dollars. This criticism marks a new front in the administration's ongoing conflict with the Federal Reserve.

The renovation project, initially planned to include a rooftop garden, a private dining room for VIPs, elevators, water features, and high-end marble, has been a point of contention. The director compared the costs of similar federal building renovations to the extravagant expenses of Powell's project, asserting that the costs were disproportionately high. The 2.5 billion dollar renovation of the Marriner Eccles Building in Washington D.C. has been a focal point of this criticism, with the director claiming that its cost is nearly equivalent to that of the Palace of Versailles.

President Trump has been a vocal critic of the Federal Reserve's interest rate policies, labeling Powell as "stubborn" and "dumb" for maintaining interest rates between 4.25% and 4.5% since the beginning of the year. The Federal Reserve has stated that it cannot further reduce interest rates until it has a clearer understanding of how Trump's trade wars will impact U.S. inflation. Trump has also accused the Federal Reserve of costing the U.S. government thousands of billions of dollars in refinancing costs due to its refusal to lower interest rates.

Republican members of Congress have also criticized the Federal Reserve over the renovation costs, with concerns that the project was out of touch with the struggles of ordinary Americans. The Federal Reserve announced in May that it would reduce its workforce by more than 10% to become a more responsible steward of public resources. Powell had previously dismissed media reports of extravagant spending on the renovation project as inaccurate, stating that many of the proposed facilities had been canceled.

However, the director of the Federal Housing Finance Agency, appointed by Trump, accused Powell of misleading Congress and called for his resignation. Trump echoed these sentiments, supporting calls for Powell to step down before the end of his second term in May 2026. The director's letter also raised concerns about whether the project complied with the National Capital Planning Act, suggesting that Powell's testimony to Congress indicated deviations from the approved plans by the National Capital Planning Commission. The director demanded that Powell respond to the questions raised in the letter within seven working days.

This escalation in criticism from the Trump administration's allies marks a significant shift in the ongoing conflict with the Federal Reserve, with direct attacks on Powell's leadership and management of the institution. The administration's new strategy focuses on allegations of mismanagement and extravagant spending, adding a new dimension to the long-standing dispute over monetary policy.