Fed Chair Powell Requests Inspector General Review Amid Scrutiny Over Costly Headquarters Renovation

Federal Reserve Chair Jerome Powell has formally asked the central bank’s inspector general to review the escalating costs of its Washington, DC, headquarters renovation, amid intensifying criticism from the Trump administration over the project’s price tag and alleged extravagance.

The renovation, which covers two Federal Reserve buildings including its main Eccles Building, is now estimated to cost approximately $2.5 billion — about $700 million more than originally projected. The project, in progress for several years, includes structural updates, code compliance, and the removal of hazardous materials like asbestos and lead. The Fed maintains that neither building has undergone a comprehensive upgrade since their original construction.

The request, made weeks ago, was confirmed by a spokesperson for the Fed’s Office of the Inspector General, though no further comment was provided. The move follows a surge in political pressure, including public criticism from White House officials and key members of President Donald Trump’s economic team.

Russ Vought, the head of the Office of Management and Budget, recently described the project as an “ostentatious overhaul” and questioned whether it complies with local building regulations. Kevin Hassett, Director of the National Economic Council, echoed those concerns, calling it a case of “excess spending” and suggesting that it highlights a broader oversight issue at the Fed.

While the Federal Reserve is self-funded and not subject to the same budgetary controls as executive agencies, the Trump administration has seized on the renovation costs as a new flashpoint in its broader efforts to exert influence over the central bank. Some officials have even speculated whether the controversy could be used to justify removing Powell, though legal experts note that doing so would face significant constitutional and statutory hurdles.

The inspector general, Michael Horowitz — a Trump-era appointee previously lauded by the administration for his Justice Department oversight — now holds the authority to investigate any aspect of the renovation he deems necessary.

For its part, the Federal Reserve has pushed back on the accusations. The central bank posted a detailed explanation of the project on its website, noting that many design elements were scaled back or eliminated due to rising construction costs.

The timing of the inspector general’s review is notable, as it coincides with broader political debates over central bank independence. Powell, whose term ends in May 2026, has come under fire from Trump allies for not cutting interest rates, though there has been no indication that he plans to resign or alter course in response to political pressure.

The Assoviated Press, CNN, CNBC, and Politico contributed to this report.