President Donald Trump has escalated his criticism of former Federal Reserve Chair Jerome Powell, demanding his resignation from the central bank's Board of Governors following the release of the Inspector General's report. As reported by NDTV, Trump posted on social media Wednesday that Powell should be 'forced to resign from the Board' over the renovation project's cost overruns. The president stated 'This is Jerome Powell's fault, and he should be forced to resign, IMMEDIATELY! If he doesn't resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence, both of which are completely unacceptable.' Trump has directed Attorney General Todd Blanche to study the inspector general's report and make a determination regarding potential action against Powell.
The Federal Reserve's Inspector General has concluded its investigation into cost overruns in the central bank's renovation project, finding no grounds for a criminal referral or administrative misconduct tied to the project. According to the IG's report, at no point during their evaluation did they find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the US attorney general. However, the report outlined extensive management shortfalls that caused the project's cost to balloon from the initial estimates of $1.3 billion in 2020. The Fed's board failed to act on failings linked to cost overruns on a previous project and didn't implement a recommendation to impose a stated cost limitation. As recently as July 2026, four years after the project began and after tenders had been awarded, the Fed had not established a guaranteed maximum price. The IG also noted that design changes, site conditions and inflation were other factors that contributed to the cost escalation.
The renovation project, which involved the central bank's two historic buildings on the National Mall in Washington, has experienced a roughly $1 billion cost overrun, bringing the total project cost to approximately $2.4 billion. As reported by the IG, the central bank ultimately paid $346 million for plumbing and air conditioning, which is triple the initial estimate. The project's budget jumped dramatically from $1.317 billion in 2020 to $2.381 billion by December 2024. Construction costs alone more than doubled, from $921 million to $2.018 billion. The project's completion, originally expected in 2024, has now slipped to December 2027 due to design changes and management delays.
The 120-page IG report outlined extensive management shortfalls, including a failure by the Fed to follow through on what it intended to be a 'guaranteed maximum price' contract that would make the contractor responsible for cost overruns. According to the report, the maximum price was never actually established, with Fed project managers awarding subcontracts that continued to escalate the price and timeline of the project. The IG noted that design elements like marble, water features and a garden terrace cited by critics 'did not materially contribute' to the cost overruns, as they were largely included in the original design. The Fed board also did not monitor the project's day-to-day developments closely enough and at one point decided against seeking more competitive bids for elements of the project to keep it moving. Other issues highlighted by the OIG included substantial cost increases due to a lack of bids for some work and internal governance that wasn't equipped to run a project of this magnitude and complexity.
The cost overruns became a key component of Trump's pressure campaign against Powell, with the president repeatedly criticizing him over monetary policy and using the Fed's headquarters renovation as a cudgel against him. The DOJ opened its investigation in January over Powell's 2025 Senate testimony, but a federal judge later quashed the subpoenas citing 'essentially zero evidence' of a crime, before prosecutors dropped the probe in April. During Trump's visit to Fed headquarters to inspect the renovations, Powell even fact-checked Trump's cost estimates in real time before the cameras. The criticism prompted congressional scrutiny and spurred the Justice Department to briefly open a criminal probe into Powell, before suspending it amid intense backlash from some Republican lawmakers. Warsh in his letter agreed to implement all seven corrective actions recommended by the IG, including launching an audit of the project and searching existing contracts for costs that might be recouped. He also disclosed that he had asked the Government Services Administration to examine the project and help oversee its completion.
