The recent renovation project at the Federal Reserve headquarters has drawn criticism from the Trump administration, accusing it of being too costly and extravagant. In response to external doubts, Federal Reserve Chairman Jerome Powell wrote a letter to the White House Office of Management and Budget Director on Thursday (July 17) to defend the project, emphasizing that the overall renovation was carried out in compliance with the law, focusing on safety and repairs, and refuting rumors of “luxurious facilities” circulating outside.
Last week, White House Office of Management and Budget Director Russell Vought accused Powell of “mismanagement” of the headquarters renovation project, describing the project as “extravagant waste,” noting that the overall budget has exceeded the original plan by $700 million. He questioned whether the Federal Reserve misled Congress or failed to report project changes to the National Capital Planning Commission (NCPC) as required by law.
White House spokesperson Karoline Leavitt also stated at a press conference that the project was “a luxury mansion created for the Federal Reserve Chairman,” saying it was “completely unnecessary and overpriced.”
President Trump himself told the media that if Powell was involved in fraudulent behavior in project management, he might dismiss Powell from his position.
In response to the aforementioned criticisms, Powell wrote to Vought, emphasizing that since the approval of the renovation project in 2017, it has been reviewed annually by the Federal Reserve Board of Governors, and the inspector general can audit all costs and details at any time.
He pointed out that the project includes structural repairs and safety upgrades, such as asbestos and lead contamination removal, comprehensive replacement of old electrical, plumbing, heating, and fire systems.
Powell also stated that the renovation project does not include private elevators or VIP restaurants, nor does it involve laying new marble extensively; only necessary repairs are made to damaged marble or in accordance with historical preservation guidelines.
He also addressed concerns about the reporting process, stating that the Federal Reserve submitted designs to the National Capital Planning Commission in 2020 and 2021, which were approved. Subsequent changes were minor adjustments aimed at “simplifying the project, controlling delays and costs,” and did not constitute a “major change” as defined by the NCPC, thus not requiring re-reporting.
In fact, Trump’s dissatisfaction with Powell has long been rooted in his refusal to lower interest rates. Trump has repeatedly criticized Powell as being too slow in action, for not lowering the benchmark interest rate from the current 4.25% to 4.5%, and even hinted at the possibility of replacing the Federal Reserve Chairman.
Although the White House and some officials have raised strong doubts about the renovation case, there are differing views among Republican lawmakers in Congress.
House Financial Services Committee Chair, Republican French Hill, said at a press conference on Thursday, “I don’t believe the President has the authority to dismiss Powell.”
Hill also pointed out that Powell’s term as chairman will expire in 2026, and Trump will have the opportunity to appoint a new board member this winter, which is the key issue.
Florida Republican Representative Anna Paulina Luna supports dismissing Powell, while another Florida Republican Representative Byron Donalds stated, “We’re not there yet.”
On Wednesday, Republican Senator John Kennedy expressed a similar stance, emphasizing the importance of maintaining the Federal Reserve’s independence for financial market stability.
“I don’t think any president has the authority to dismiss the Federal Reserve Chairman,” Kennedy added, “I firmly support the independence of the Federal Reserve. There are some countries in the world that do not have independent central banks – just ask Turkey, what the result of their actions was, at one point Turkey’s inflation reached up to 30%.”