Federal Reserve chief Jerome Powell speaks in a recent photo. Getty Images
Donald Trump toured the Federal Reserve's renovation site in Washington, DC, on Thursday. He clashed with Fed Chair Jerome Powell over the project's high cost. Trump claimed the renovation cost over $3 billion, but Powell quickly corrected him. He said the actual budget is $2.5 billion and explained that Trump included a third building already renovated.
Powell said, “You just added in a third building… built five years ago.”
A Rare Visit
Presidents rarely visit the Fed’s headquarters. Trump’s appearance was announced just hours before the event. Powell and other officials, including Republican senators and White House staff, joined the tour. Everyone wore white hard hats while walking through the site.
Trump Pushes for Lower Rates
Trump used the visit to push Powell to lower interest rates. While answering a reporter’s question, he said, “I’d love him to lower interest rates.” Powell has resisted rate cuts this year. The Fed wants to see how Trump’s trade policies affect the economy before making any changes.
Criticism Over Fed Spending
Trump and his team have strongly criticized the Fed’s $2.5 billion renovation. He suggested the spending was excessive and even said it might be a reason to fire Powell. However, he later backed down and said Powell would finish his term, which ends in May.
“I think he’s done a bad job,” Trump said, “but he’s going to be out pretty soon anyway.”
Powell Defends the Renovation
Powell explained that the buildings needed major repairs. Problems included lead, asbestos, outdated plumbing, broken heating, and poor ventilation. Security upgrades like blast-proof windows also added to the cost. Powell said these updates were necessary and overdue.
There are no luxury features like special elevators or private dining rooms, Powell told the Senate earlier. He also said the Fed followed proper procedures. The project does not require approval from the federal construction agency, though the Fed worked with them voluntarily.
Project Delays and Cost Overruns
The Fed first estimated the cost at $1.9 billion, but it rose to $2.5 billion. Inflation, material shortages, and supply chain problems led to higher prices. The COVID-19 pandemic also caused delays. Some plans were dropped, such as rooftop seating, to avoid the appearance of luxury spending.
Renovation Timeline and Workforce
Work on the buildings is ongoing. The project should finish by fall 2027. Around 3,000 Fed employees will move into the new offices by early 2028. Both buildings are nearly 100 years old and on the national historic list, making the renovation complex and expensive.
Powell has asked the Fed’s inspector general to review the project again. He wants to prove the renovation followed all rules and was necessary.
