Trump feuds with Powell on tour of Fed’s $2.5 billion renovation

By Kevin Liptak, Bryan Mena, CNN

Washington (CNN) — The long-simmering clash between President Donald Trump and Federal Reserve Chair Jerome Powell was on full public display during a Thursday afternoon tour of the renovation site at the central bank’s headquarters in Washington, DC.

The tension between the two men was apparent during an exchange about the total cost of the Fed’s renovation project. Trump cited a figure above $3 billion, higher than the $2.5 billion in expected costs. Powell appeared shocked by Trump’s comment and said “I’m not aware of that.”

Powell then pointed out that Trump’s figure included the cost of a third Fed building that was refurbished several years ago and reopened in 2021.

“You just added in a third building is what that is,” Powell said. “It was built five years ago.”

It’s rare for any president to visit the headquarters of the Fed: Powell’s attendance was announced by the president at the last minute on his social media platform. Others in attendance included South Carolina Republican Sen. Tim Scott, North Carolina Republican Sen. Thom Tillis, OMB Director Russell Vought, FHFA Director Bill Pulte and White House officials James Blair and Will Scharf, many of whom wore white hard hats during the tour.

The Fed’s construction project has emerged as an excuse for the Trump administration to ramp up pressure on Powell to lower interest rates, which central bankers have resisted throughout this year because they want to see how Trump’s tariffs affect the economy first before considering rate cuts.

The visit had been previously scheduled as an opportunity for members of Trump’s staff to observe a renovation project of the Fed’s historic headquarters, which has gone well past budget and which the White House says may have violated planning requirements. The Fed gave a handful of news outlets a rare look of the construction project hours before, in a strategic play to mitigate any potentially inaccurate claims and attacks stemming from Trump’s tour.

The last president to visit the Fed headquarters — situated along the National Mall only a few blocks from the White House — was George W. Bush in 2006, when he traveled the short distance to attend a swearing-in ceremony for Ben Bernanke.

Typically, presidents have avoided taking any steps that might appear to interfere in the central bank’s independence, particularly when it comes to the politically sensitive issue of interest rates.

But Trump has openly gone to war with Powell over the Fed’s decision to keep rates steady. He has nicknamed the central banker “Too Late” and pointed to Powell as a reason the economy isn’t running at full throttle. Trump has suggested a rate cut of roughly 3 percentage points.

The Fed is expected to keep rates steady at a meeting next week.

More recently, Trump and top advisers at the White House have identified the issue of the Fed’s renovation project as a point of vulnerability for Powell. Trump said last week he believed the $2.5 billion project — which has gone significantly over budget — could be a fireable offense.

Later, however, Trump said he had no plans to fire Powell — which his advisers have warned could set off a worldwide economic calamity and would be immediately challenged in court. On Tuesday, Trump seemed to acknowledge the central banker would be in the role until his term ends next May.

“I think he’s done a bad job, but he’s going to be out pretty soon anyway,” he said in the Oval Office. “In eight months, he’ll be out.”

Still, even as Trump backs off his firing threats, he has made clear he plans to make the remainder of Powell’s term uncomfortable, particularly when it comes to the matter of the Fed’s building project.

He was joined on the visit by Office of Management and Budget Director Russ Vought, Federal Housing Finance Agency head Bill Pulte and White House deputy chief of staff, James Blair.

Vought suggested in a social media post earlier this month that Powell had broken the law by failing to comply with government oversight regulations related to the Fed’s ongoing renovation, which includes the historic marble Marriner S. Eccles Building on the National Mall.

In a response last week, Powell said the renovation and its financing have always had careful oversight from the central bank’s board and its own watchdog.

In his letter, Powell noted that both buildings needed “significant structural repairs and other updates… including the removal of asbestos and lead contamination, complete replacement of antiquated systems such as electrical, plumbing, heating, ventilation, and air conditioning, as well as fire detection and -2- suppression systems.”

The Fed has also published a virtual tour of its construction, which includes some of the asbestos removal.

The $2.5 billion quagmire

Presidents routinely use the Fed chair as a convenient punching bag, imploring the leader of the independent central bank to lower rates to help boost the economy. But Trump and his advisers and surrogates have taken those commonplace gripes to a whole new level.

Although the name-calling continues, the attacks on Powell began to focus starting last month on the Fed’s expensive renovation. During his biannual testimony before Congress, Powell was grilled repeatedly on the project’s enormous expense and cost overruns. Republicans have nicknamed the project “the Palace of Versailles” and accused Powell of overseeing an overly ostentatious project with ornate sculptures and luxurious features. Powell has denied those accusations, arguing that the renovation of the century-old buildings is long overdue and necessary.

“There’s no VIP dining room, there’s no new marble … there are no special elevators, just old elevators that have been there,” Powell testified before the Senate last month.

The project involves the renovation of the Eccles and 1951 Constitution Avenue buildings, which were constructed nearly 100 years ago and are included in national historic site registries – adding to the complexity of the renovation and its cost.

Notes from reporters who attended the morning tour detailed a typical construction site going at the Marriner S. Eccles building, one of the two facing the National Mall being refurbished, with scaffolding, cement mixers and construction machines throughout.

According to Fed staff, new upgrades to the building for security purposes — such as blast-resistant windows and shear walls — were a big driver of the renovation’s cost. The Fed’s headquarters is expected to be designated with the Department of Homeland Security’s highest level of security for federal buildings.

Seating on the rooftop of the Eccles building, which was originally included in plans from 2021, was nixed in order to avoid the appearance of being an amenity, even though it would not have been expensive to include it, Fed staff said.

Staff also noted during the tour that tariffs and higher costs for materials were big reasons for the cost overruns compared to estimates from 2018 and 2019. The project is expected to be finished by the fall of 2027, with a DC-based workforce of about 3,000 moving in through March 2028.

Despite their age, neither building has been thoroughly renovated, Powell said in his response to Vought earlier this month. An independent report from 2019 authored by the National Capital Planning Commission (NCPC), a body that oversees construction projects for the federal government, said that many of the Eccles’ building systems are “at the end of their useful life.”

Originally estimated to cost $1.9 billion, the price tag ballooned to $2.5 billion over the past several years. The cost of the project rose considerably in part because of inflation and delays. A 2023 Fed budget document attributed some of the additional cost to “significant increases in raw materials … higher labor costs, and changes in construction schedule expectations which lengthen use of leased space.”

As costs escalated, the Fed’s renovation, under the direction of Powell, was scaled back somewhat. Those changes, although designed to save costs, caught Vought’s attention.

Vought has accused Powell of lying in his testimony – an accusation that Powell has denied. The OMB director said Powell made changes to the Fed’s plans without consulting the NCPC, which Vought argued the Fed was obligated to do.

Powell said the Fed didn’t need to resubmit paperwork because the changes weren’t “substantial,” and the Fed was working with the NCPC on a voluntary basis, only. The independent Fed is “not generally subject to the direction” of the NCPC, Powell replied in his letter to Vought last week.

The changes to the Fed’s plans were “intended to simplify construction and reduce the likelihood of further delays and cost increases,” Powell said. “The Board does not regard any of these changes as warranting further review.”

The Federal Reserve has its own budget and set of rules separate from the federal government’s. Nevertheless, Powell ordered the Fed’s inspector general to review the project for a second time.

This story has been updated with additional information.

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