Fed pushes back on White House claims of extravagant renovations
The video, posted on the Fed's website, includes captions explaining that the project is a 'complete overhaul and modernization' of two buildings that have not had major renovations since the 1930s.
Direct pushback from the Fed is rare as the central bank tries to minimize public communication to preserve its non-partisan nature. But in recent weeks, the Trump administration has dramatically escalated attacks against the central bank, especially its chair, Jerome Powell, amid calls for the central bank to cut interest rates.
The White House claims that the Fed mismanaged funds for renovations, which were approved in 2017 and were estimated to cost $1.9bn in 2019. The costs are now estimated to be closer to $2.5bn – Donald Trump has claimed 'it's possible there's fraud involved'.
According to the Fed, the construction includes 'remediation and updates to make the buildings safe, healthy and effective places to work by removing asbestos and lead contamination, and accommodating modern workplace technology', the Fed said in a statement.
The central bank also included an FAQ that directly responds to accusations from the Trump administration that the renovations include unnecessary and expensive modifications, like a VIP dining room and a garden terrace.
'No new VIP dining rooms are being constructed as part of the project,' the Fed said. The building 'has conference rooms, which are being renovated and preserved. They are also used for mealtime meetings.'
Since the start of his second term, Trump has been trying to get the Fed to lower interest rates, even as the central bank resisted in light of his erratic tariff policies. As the Fed refused to budge, Trump has made it clear that he wants to fire Powell. But the supreme court suggested removing Powell could be unconstitutional, and Wall Street investors appear to be against the idea.
The Trump administration seems to have grasped on to the Fed building renovations as a possible workaround. When asked last week whether he would fire Powell, Trump said, 'it's highly unlikely unless he has to leave for fraud'.
Attacks from the White House continue. On Monday, the US treasury secretary, Scott Bessent, told CNBC that 'the entire Federal Reserve institution and whether they have been successful' needs to be examined. In Congress, the Florida representative Anna Paulina Luna referred Powell to the justice department, accusing him of lying under oath about the renovations.
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