Federal Reserve Quietly Defends Itself Amid Growing Scrutiny from Trump Administration

The Trump administration is turning up the heat on Fed Chair Jerome Powell, now zeroing in on a $2.5 billion renovation of the Fed’s headquarters. A new public FAQ by the Fed attempts to defend the costs as pressure mounts from Trump allies to lower rates—or for Powell to resign.

Key Facts:

The Federal Reserve is undergoing a $2.5 billion renovation of its Eccles Building in D.C., now about $700 million over budget.
Trump ally Russell Vought called the project an “ostentatious overhaul” and accused Powell of mismanagement.
Vought pledged on July 12 to investigate the renovation, citing fiscal concerns and alleged misuse of resources.
The Fed responded via a newly updated FAQ page, denying extravagant claims and noting taxpayer dollars are not funding the project.
Trump continues pressuring Powell to cut interest rates and has called for his resignation multiple times.

The Rest of The Story:

The Federal Reserve has come under political fire once again, this time over a renovation project now estimated at $2.5 billion—about $700 million above budget.

The Office of Management and Budget Director Russell Vought, a key Trump ally, publicly accused Fed Chairman Jerome Powell of mismanaging the institution and criticized the renovation as an example of lavish excess.

Vought claimed the renovation included rooftop terraces, VIP dining rooms, and premium materials.

Chairman Jerome Powell has grossly mismanaged the Fed.

While continuing to run a deficit since FY23 (the first time in the Fed's history), the Fed is way over budget on the renovation of its headquarters.

Now up to $2.5 billion, roughly $700 million over its initial cost.… pic.twitter.com/lHK4cWlAvf

— Russ Vought (@russvought) July 10, 2025

The Fed responded with an FAQ page clarifying that “no new VIP dining rooms are being constructed” and that existing conference rooms—used for meals—are being preserved.

The Fed also cited unforeseen asbestos and design revisions as reasons for cost increases.

Importantly, the central bank clarified that taxpayers are not covering the renovation costs.

The Fed is self-funded through earnings on securities and fees from banks.

Still, the criticism signals a broader push from Trump-aligned officials to pressure Powell out of his role before his term ends next year.

Commentary:

The Trump team has been vocal about its frustration with Jerome Powell’s leadership for years, especially over interest rate policy.

But with inflation stabilizing and the economy in flux, Trump is intensifying the pressure—this time taking aim at the Fed’s internal spending.

The $2.5 billion renovation gives the administration an opening to publicly challenge Powell’s stewardship.

Vought’s accusations, amplified on social media and in interviews, provide political ammunition to cast the Fed as disconnected and wasteful.

His remarks on CNBC about investigating the “largesse” of the project were not casual—they were calculated.

Despite Powell’s refusal to bow to rate-cut demands, it’s clear Trump allies are now looking for other leverage.

The fact that Vought is formally opening an investigation into the renovations suggests this is part of a larger strategy to build a case for Powell’s early departure.

While Powell has remained relatively silent on resignation, the Fed’s response—an updated FAQ page—is a quiet signal that it’s aware of the mounting pressure and intends to defend its ground.

The bank was careful to reject claims about luxury amenities and reinforce that no taxpayer dollars are involved.

Still, none of this is likely to slow down the political campaign against Powell.

Trump’s goal is clear: lower interest rates heading into the election year.

If Powell won’t bend, then removing him becomes a political imperative.

This also sets up a larger debate about the independence of the Federal Reserve.

By going after Powell personally and financially, the Trump team is effectively saying that monetary policy must align with their political and economic goals—or else.