Jerome Powell on Monday asked the Federal Reserve’s inspector general to conduct a review of its $2.5 billion renovation project as the Trump administration is using the works to drive up pressure on the chief of the U.S. central bank.
In a letter addressed to Senate Banking Committee Chair Tim Scott (R-S.C.) and the panel’s top Democrat Elizabeth Warren (Mass.), first reported by Politico, Powell said he asked IG Michael Horowitz to “take a fresh look at the project.”
Powell’s request, which was first reported by Axios, comes after Trump’s economic adviser Kevin Hassett suggested that the renovation works could be used as “a predicate” to order the Fed chair’s removal.
“I think that whether the president decides to push down that road or not is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed,” Hassett told ABC’s “This Week” on Sunday.
Vought, the director of the Office of Management and Budget, suggested a probe into the project is warranted, accusing Powell of “grossly [mismanaging] the Fed,” by noting that the works have exceeded their initial cost by about $700 million.
The central bank appeared to hit back at the allegations by posting a dedicated section to its frequently asked questions page addressing some of the main criticisms about the renovation, declaring that “no new VIP dining rooms are being constructed as part of the project.”
The renewed scrutiny on Powell appears to stem from the president’s disagreement with the Fed’s resistance to bow to his demand for lower interest rates. The U.S. central bank kept its rates steady last month, citing the potential impact of Trump’s tariffs on inflation.
While Powell’s term as Fed chair concludes in May 2026, Treasury Secretary Scott Bessent on Tuesday said the search for his replacement is already underway.
“There’s a formal process that’s already starting,” Bessent told Bloomberg TV. “There are a lot of great candidates, and we’ll see how rapidly it progresses. It’s President Trump’s decision, and it will move at his speed.”
Bessent suggested that the Trump administration would also favor Powell stepping down as Fed governor next year even though he could keep that role until early 2028.
“I think it’d be very confusing for the market for a former Fed chair to stay on,” he added.
Bessent, though, rejected the notion that removing Powell as Fed chair “is under active consideration” by the president.
Trump is “not looking to fire Chair Powell,” Bessent told Bloomberg.
Still, Trump has previously said he would welcome Powell’s resignation.
“Well, I think if Jerome Powell stepped down, it would be a great thing. I don’t know that he’s going to, but he should,” he said over the weekend.
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