FX168 Finance News (Asia-Pacific) – The Financial Times reported on Friday (July 11th) that the White House has accused Jay Powell of ‘serious’ mismanagement of a ‘showy’ renovation project at the Federal Reserve’s headquarters, opening a new front in its battle against the Fed Chair.
(Screenshot source: The Financial Times)
Russell Vought, Director of the White House Office of Management and Budget, wrote in a letter posted on Social Media X that the Fed Chair, Jay Powell, had ‘seriously mismanaged’ the renovation of the Fed’s headquarters, which has exceeded the budget by $700 million.
In the letter, an ally of President Trump stated, “The President is deeply concerned about your management of the Federal Reserve System. Instead of trying to correct the fiscal direction of the Fed, you have stubbornly pursued a lavish renovation of the (Fed’s) Washington D.C. headquarters.”
Vought pointed out that the cost of the Fed’s renovation might be only $500 million less than the cost of renovating the Palace of Versailles. This accusation marks a new strategy in the conflict between the Trump administration and the Federal Reserve.
Vought wrote in the letter, “The Federal Reserve’s renovation project is currently costing up to $2.5 billion, approximately $700 million more than the initial cost. The project includes a terrace roof garden, water features, VIP elevators, and high-end marble. At a cost of $1,923 per square foot, it is twice the cost of renovating a typical historic federal government building. In today’s dollars, the renovation of the Palace of Versailles would have cost $3 billion.”
U.S. President Donald Trump frequently criticizes the Federal Reserve’s interest rate policies, calling Jay Powell a ‘stubborn mule’ and a ‘clueless person,’ as the Fed has maintained interest rates at 4.25-4.5% since the beginning of the year.
The Federal Reserve stated that it will not further cut interest rates until more evidence is available on how Trump’s trade war will affect U.S. inflation.
Trump has also repeatedly accused the Federal Reserve of not cutting interest rates, leading to an increase in refinancing costs for the U.S. government by tens of billions of dollars.
Republican lawmakers have criticized the Federal Reserve over the cost of its renovation, with Senate Banking Committee Chairman Tim Scott stating that the renovation seems out of place while ordinary Americans are struggling.
Billionaire Tesla CEO Elon Musk also highlighted the cost of the reconstruction project, which began in 2021, when he was the head of what Trump called the ‘Department of Government Efficiency.’
In May this year, the Federal Reserve announced that it would cut its workforce by more than 10% to be a ‘responsible steward of public resources.’
However, Voight’s remarks mark the first direct attack from a close ally of Trump.
Powell called media reports about excessive renovation ‘inaccurate’ and claimed in a congressional hearing that many features in the original plan, including dedicated elevators, a beehive, and a rooftop terrace, had been canceled.
Bill Pulte, the Federal Housing Finance Agency chairman appointed by Trump, claimed that Powell’s testimony to Congress was misleading and, in a comment retweeted by President Trump, called for his resignation. Trump echoed Pulte’s call for Powell to step down before the end of his second term in May 2026.