Trading a suit for boots and a hard hat: Behind the scenes at the Federal Reserve, mid-renovation

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — Typically I wear a suit and tie when visiting the Federal Reserve, one of the most powerful financial institutions in the world. But on Thursday, it was jeans, boots and a hard hat.

I was not at the Fed for the usual discussions of interest rates, inflation and unemployment, but for something more down to earth: a tour of what has become the most famous — or notorious — building renovation in Washington, a $2.5 billion overhaul of two of the Fed’s office buildings.

The project has become an increasingly unpleasant headache for the embattled chair of the Fed, Jerome Powell, as he weathers nearly incessant personal attacks from President Donald Trump.

Trump has been clear about what he wants from Powell, whom he appointed to lead the central bank in 2017: lower interest rates. Yet the Fed is intended to be an independent agency, and the Supreme Court has signaled that the president can’t fire Powell just because the Fed chair won’t cut rates as fast as Trump wants. But he might be able to do so “for cause,” meaning some kind of malfeasance or neglect. Trump last week suggested that the escalating construction costs could be grounds to fire Powell.

With that threat looming in the background, the Fed decided to open up its massive project for a few journalists — including me — to get a closer look.

A massive project is revealed

On Thursday, Fed staff led a small group of reporters, photographers and television cameras on an extensive tour of the active construction site that comprises the two 1930s-era buildings. The renovation began in 2022, and the Fed hopes to complete it in the fall of 2027.

By providing journalists — and, by extension, the public — such extensive access, the Fed clearly hopes greater transparency will help beat back the White House’s criticism. Trump toured the same site several hours after the reporters, then downplayed his threats to fire the Fed chair.

In June, Sen. Tim Scott, R-S.C., the chairman of the Senate Banking Committee, which oversees the Fed, suggested the rebuild has been extravagant, and includes “rooftop terraces, custom elevators that open into VIP dining rooms, white marble finishes and even a private art collection.”

Fed staff, who requested anonymity to discuss the renovation, showed reporters what they said are future conference rooms that are sometimes used for meals, not “VIP dining rooms.” An elevator is being upgraded to be more accessible to people with disabilities. And some white marble finishes were added at the insistence of a local commission, the staff noted, which included several Trump appointees.

The journalists walked around dumpsters and pipes and evaded front-end loaders, while occasionally straining to hear the explanations of Fed staff over the sounds of drilling, cutting and hammering. About 700 to 800 workers are involved in the project across two shifts each day. Reporters visited the roof of the Fed’s main headquarters, the Marriner S. Eccles building, which has sweeping views of the Lincoln Memorial, the National Mall and parts of downtown Washington.

Fed staff said the roof would not have “rooftop terraces” but instead would include grass and other plants as part of a “green roof” that would reduce cooling costs and stormwater runoff. There had been plans for a seating area but that had been removed because it appeared to be an amenity.

Fed staff breaks down costs

The staff sought to highlight the many costs they said were largely out of their control: blast-resistant windows and other security upgrades, modern electronics and HVAC systems, and historic preservation efforts that led to the use of more marble.

The workers also used plywood extensively to protect stairs and many wall coverings, which Trump singled out as too costly.

“You saw the protection of plywood,” Trump told reporters after his tour. “I mean, that was a lot of money just to protect it for a period of time. I would have done it very gingerly and easily and not have to spend millions of dollars on protection.”

It is clearly a massive project. The Fed has shut down a street that runs between the two buildings. Underneath will be a part of a parking garage, as well as a tunnel connecting the two renovated buildings. The Fed says after the project they will be able to house more of their 3,000 employees in the two buildings and reduce its rented office space.

After his own tour, Trump appeared to lower the temperature around the project, at least for now, in a post on his social media platform Truth Social: “The cost overruns are substantial but, on the positive side, our Country is doing very well and can afford just about anything — Even the cost of this building!”

Should Powell cut the Fed’s short-term interest rates soon — which economists say could happen in September — that could appease Trump. And after that, you may never hear about the Fed’s renovations again.