Editor
The Federal Reserve is currently facing scrutiny over its plans to expand a building project that some in the White House have harshly criticized. According to a source, Fed Chair Jerome Powell has called for an internal review following complaints about the project, which was initially estimated to cost $2.5 billion but has run into cost overruns. This has led to accusations of poor management from President Donald Trump and other officials.
Kevin Hassett, who heads the National Economic Council, expressed his concerns on CNBC, emphasizing that it’s troubling for the Fed to be able to print money and spend such a large sum without proper oversight from Congress. He described the situation as a significant issue of oversight and wasteful spending.
The inspector general’s office, which oversees the Fed and the Consumer Financial Protection Bureau, is tasked with investigating any fraud or misuse of funds. Powell’s request for a review was first reported by Axios. Additionally, Russell Vought, the head of the Office of Management and Budget, publicly criticized the expansion plans, which involve two of the Fed’s three buildings in Washington, D.C., including the main Eccles Building.
In a recent interview with CNBC, Vought compared a new building project to the famous Palace of Versailles and accused Powell of poor financial management at the Federal Reserve.
In response, the Federal Reserve has created a detailed FAQ page on its website. This page explains some of the changes to the project, which were made partly due to construction costs being higher than expected. They also pointed out that the project will address safety issues by removing hazardous materials like asbestos and lead, and will update the buildings to meet current safety standards. While there has been some maintenance done over the years, it’s important to note that neither building has had a full renovation since they were originally built.
Additionally, since the Fed isn’t funded by taxpayers, it operates independently of the Office of Management and Budget. The Fed has been working with the National Capital Planning Commission for this project but mentioned that they feel the changes made do not require any further review.
On a different note, former Fed Governor Kevin Warsh criticized the renovation costs as “outrageous,” suggesting they reflect the central bank’s misguided direction. He’s seen as a potential candidate to replace Powell when his term ends in May 2026.
