
President Donald Trump says he may have found a new way to remove Federal Reserve Chair Jerome Powell — by targeting the central bank’s ballooning $2.5 billion headquarters renovation.

The extensive overhaul of two Federal Reserve buildings in Washington, originally budgeted at about $1.9 billion, has drawn Trump’s ire as he continues his push to unseat the independent central banker he once appointed.
“When you spend $2.5 billion on, really, a renovation, I think it’s really disgraceful,” Trump said, claiming Powell doesn’t need a “palace.”
Trump has long blamed Powell for refusing to slash interest rates further, arguing cheaper borrowing would help offset costs from his administration’s tariffs. But Powell has warned that premature cuts could “worsen inflation and ultimately raise those borrowing costs.”
Trump indicated this week that Powell’s handling of the costly renovation could justify the “unprecedented and possibly legally dubious step” of firing him before his term ends in 2026. Asked whether the project could be grounds for removal, Trump said, “I think it sort of is.”
The Fed says its main headquarters, the 1930s-era Marriner S. Eccles building, needed an overhaul to fix aging plumbing, electrical, and HVAC systems — plus remove asbestos and lead. The project includes an adjacent building purchased in 2018, though the board scrapped plans to update a third building after costs spiked.
Russ Vought, the White House budget director, called the renovation an “ostentatious overhaul,” citing alleged features like “rooftop terrace gardens, VIP private dining rooms and elevators, water features, premium marble, and much more.”
Powell has strongly rejected those claims. “There’s no VIP dining room,” he told lawmakers. “There’s no new marble. ... There are no special elevators. There are no new water features. ... And there's no roof terrace gardens.”
White House officials now accuse the Fed of violating planning rules by scaling back some building features without new approvals. James Blair, the deputy chief of staff, said Powell’s testimony "leads me to conclude the project is not in alignment with plans submitted to & approved by the National Capital Planning Commission in 2021.”
The Fed insists it voluntarily works with the commission but isn’t legally bound by it, pointing instead to oversight from Congress and its own independent inspector general. Powell has asked for an independent review of the entire renovation.
If Trump succeeds in removing Powell “for cause” — by claiming misconduct or dereliction of duty — it could shatter the Fed’s political independence and rattle financial markets already wary of rate uncertainty.
The dispute over the Fed’s renovation underscores broader tensions about the independence of the U.S. central bank. Economists warn that political interference could lead to higher borrowing costs, inflation risks, and shaken investor confidence. The Supreme Court has signaled Trump can’t fire Powell over policy disagreements alone, but the “misconduct” argument is likely to face legal challenges if pursued.
Originally reported by Christopher Rugaber in NBC Washington.
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