The White House escalated its criticism of Federal Reserve Chair Jerome Powell, accusing him of mismanaging the central bank's finances. In a letter posted on social media, Trump administration official and OMB Director Russell Vought slammed Powell for running a deficit and authorizing costly renovations to the Fed’s Washington, D.C. headquarters, now estimated at $2.5 billion—about $700 million over budget.
Vought criticized the project’s features—including rooftop gardens, VIP elevators, and premium marble—calling it “ostentatious.” He compared the cost per square foot, $1,923, to that of historical federal buildings, stating, “The Palace of Versailles would have cost $3 billion in today’s dollars.”
The Federal Reserve has run a deficit since 2023, driven by high interest payouts to banks that exceed earnings from its bond portfolio. As of this week, its operating loss has reached $235 billion. Powell defended the renovation as necessary infrastructure upkeep during a recent congressional testimony, denying allegations of luxury features. “There are no new water features, beehives, or rooftop gardens,” he said, admitting to budget overruns but emphasizing the importance of fiscal stewardship.
Vought demanded answers to 11 questions about the renovation within seven business days, questioning its compliance with the National Capital Planning Act. Legal experts noted that Section 10 of the Federal Reserve Act gives the Fed wide autonomy over its buildings, limiting White House intervention.
President Trump, a frequent Powell critic, suggested the Fed should slash interest rates further and hinted Powell should resign if found misleading Congress. However, legal protections under the Federal Reserve Act and recent Supreme Court rulings limit the administration’s power to remove Fed officials except for cause.
Powell’s term runs until May 2026.