Trump demands Powell resign from Fed board over headquarters renovation

US President Donald Trump on Wednesday demanded that Jerome Powell immediately resign from the Federal Reserve's Board of Governors over cost overruns in the central bank's headquarters renovation.

Trump said he had asked Attorney General Todd Blanche to review an inspector general's report on the project.

In a post on Truth Social, Trump cited findings of deficiencies in the management of the Washington, DC, renovation project and accused Powell of failing to control its costs.

"This is Jerome Powell's fault, and he should be forced to resign, IMMEDIATELY!" Trump wrote.

He said he had instructed Blanche to study the report and determine what action to take over a project that, according to his post, would cost at least $2.5 billion.

Trump threatened legal action if Powell refused to step down, saying the US government should sue him "for either corruption or incompetence."

The inspector general's review, however, found no grounds for a criminal referral and no administrative misconduct, while identifying significant shortcomings in the Fed's oversight of the renovation.

Powell remains a Fed governor after his term as chair ended in May.

Trump highlighted passages stating that the Fed board did not obtain a project cost estimate from its construction manager until January 2026, three-and-a-half years after construction began and after more than $2 billion in construction costs had been awarded.

According to the passages quoted in his post, the board had also failed to establish a guaranteed maximum price by July 2026, leaving it without cost certainty and without transferring material risk to the construction manager.

Trump predicted that the final bill could reach $3.5 billion or $4 billion and claimed he could have completed the renovation for $25 million while preserving the buildings’ historic appearance.

Dispute over interest rates

The renovation has become a focal point of Trump's broader dispute with Powell over interest rates and the central bank's independence.

In January, Powell disclosed that the Justice Department had served the Fed with grand jury subpoenas threatening a criminal indictment related to his June 2025 Senate testimony about the renovation.

Powell said the threat stemmed from the Fed setting interest rates according to its assessment of economic conditions rather than the president's preferences.

He described the renovation and his congressional testimony as pretexts for the pressure.

In April, Powell said the Justice Department had provided assurances that it would not reopen the investigation without a criminal referral from the Fed's inspector general.

Renovation of 2 historic buildings

The project covers the Marriner S. Eccles Building, the Fed board's headquarters, and the neighboring 1951 Constitution Avenue Building.

The Fed has listed the board-approved renovation budget at $2.46 billion.

It said the work aims to modernize building systems, remove asbestos and lead contamination, improve safety and accommodate modern workplace technology.

Construction costs alone rose from an estimated $921 million in February 2020 to $2.018 billion by December 2024, according to the watchdog's findings.

The Fed has attributed overruns to inflation, unexpected remediation expenses and additional requirements from agencies reviewing the project.