Washington (AP) – the chairman of the Federal Reserve, Jerome Powell, asked a general inspector to check the costs for the renovation work of the central bank, which have attacked the White House Official House as “contested”.
A spokesman for the General Inspector, an independent watchdog, confirmed the request and rejected further comments. The request was previously reported by Axios.
For several years, the FED has been renovating two of its office buildings in Washington for a current cost estimate of around 2.5 billion US dollars, more than originally expected. The project was first approved by the Fed Board of Directors in 2017. The Trump management officers confiscated the costs and some alleged amenities in the converted buildings to extend their criticism of Powell that the President attacked because he did not reduce the short-term interest rate of the Fed.
On Thursday, Russ Vought said that President’s top budget advisor that President Donald Trump was “extremely worrying” about the “magnificent overhaul” and suggested that it may violate local buildings.
The letter was a pointed escalation in the efforts of the Trump government to obtain greater control over the Fed, an independent agency that was commissioned to search for stable prices and maximum employment. Independence from daily politics has long been seen as a critical element for the ability of the Fed to achieve these goals.
Trump has repeatedly demanded that Powell have reduced the brief -term interest rate that the central bank controls, partly because the president is of the opinion that it will reduce the government’s loan costs.
Trump threatened to dismiss Powell in April, although he later withdrawn these threats in response to share prices. Since then, the Supreme Court has signaled that the president is not authorized to remove the Fed chairman over the interest rates for a disagreement.
The law rules the Fed states that the chairman can be fired “for reasons”, e.g. Powell’s term as chairman ends in May 2026.
VOUGHT’s letter criticizes Powell’s management of the Fed and suggests that the administration could try to create a case to remove the chair for reasons.
“I still think that it is unlikely, but not impossible that Trump would try to replace Powell before his term of office expired,” said Stephen Moore, a former consultant of Trump and economist at Heritage Foundation.
The letter also indicates that the FED has changed its construction plans without notifying Washington Planning Planning Commission as a National Capital Planning Commission and possibly violating their rules. Trump recently appointed two close helpers to the Commission.
At the weekend, the Fed said in a contribution of “frequently asked questions” on its website about the construction project that it was “not divided in the direction of the Commission” and only voluntarily followed its guidelines. The FED also said that it was responsible to the Senate and the House of Representatives and is monitored by the independent general inspector, not by the White House.
The FED is not financed directly by the taxpayers and instead uses proceeds from interest payments for their enormous bond stocks and fees from banks to pay their business.
In the FAQs, the FED said that the higher costs for their project are due to increasing costs for materials, workers and equipment. The construction costs have usually risen in recent years due to the inflation leadership 2022-2023, the largest in four decades. The central bank also says that more asbestos were discovered than expected, and it had to comply with the height restrictions in Washington by being built up more underground with greater costs.
During a hearing in the Senate last month, Senator Tim Scott, a Republican from South Carolina and Chairman of the Banken Committee, criticized the Fed for “Wastest Renovation Work”, of which he said that “roof terraces, special offers in VIP dining rooms, (and) white marble interfaces.
Powell, however, denied the characterization: “There is no VIP dining room. There is no new marble. … there are no special elevators.” The Fed changed its blueprints in 2023, he added.
In the FAQs, the FED also said that a “garden terrace”, which it was referred to in the planning documents in 2021, is a “lawn to the floor level” on a parking garage, with which “rainwater management and the improvement of construction efficiency and the roof duration will increase”.
In the meantime, Trump attacked Powell again on Monday and said that he was “terrible” and “doesn’t know what the hell he does”.
In view of Trump’s tariffs, Powell held back in the event of further reductions and said that the Fed wanted to see civil servants how import taxes influence inflation and economic growth.
The Fed’s concern is that the reduction in installments on the scale discussed by Trump could make inflation worse if its tariffs actually lead to higher prices in the US economy. There is also the possibility that tariffs damage economic growth in a way that require interest cuts to limit job losses.
Trump and some of his officials have asked Powell to step down, although there is no indication that he will leave before his term of office ends in May.
“Missing revelations of the related misconduct by the FED chairman -for whom there has been no evidence -that has led to a collapse of support in the Senate, we will be 100% confident that Powell will not resign,” wrote Krishna Guha, analyst at Investment Bank evercore isi, on Monday.
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AP White House writer Josh Boak contributed to this story.
