Fed Watchdog Clears Powell Renovation of Criminal Wrongdoing — SkimNews
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- Federal Reserve Inspector General found no grounds for a criminal referral or evidence of administrative misconduct in the renovation of two Fed buildings in Washington, DC.
- The project ran roughly $1bn over budget, bringing the total estimated cost to about $2.4bn, though cost overruns on government projects are common — Trump's own White House ballroom budget has doubled from initial estimates.
- The watchdog flagged significant management shortcomings, including the Fed's failure to establish a "guaranteed maximum price" that would have shifted overrun responsibility to the contractor.
- Design features attacked by the White House — marble, water features, and a garden terrace — did not materially contribute to the overruns, according to the inspector general.
- A prior Department of Justice investigation into the project and Powell's congressional testimony was closed earlier this year after a federal judge agreed with Powell that they were a pretext for pressuring the Fed chief to lower interest rates.
- Donald Trump responded on social media Wednesday, calling on Powell to resign and writing: "He can't manage a Building, and he certainly shouldn't be allowed to manage his High Interest Rate Policy."
Why it matters: The watchdog's no-criminal-finding directly undercuts the legal pretext Trump used to pressure Powell over interest rates, yet Trump responded by renewing his resignation demand — meaning the Fed independence fight continues even after the formal case against Powell collapsed. The report simultaneously vindicates the Fed's design choices while validating real cost-management failures (no contractor cap, weak oversight) that the White House's "marble and fountains" narrative failed to prove caused the overrun.
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