The White House's new line of attack against Powell
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The Federal Reserve headquarters building under renovation. Photo: Al Drago/Bloomberg via Getty Images
In the Trump administration's war with Federal Reserve chair Jerome Powell, there is a new front — ostensibly about beehives and rooftop gardens, but really a fight for control of the U.S. central bank.
Why it matters: The White House and allies in Congress appear to be using the Fed's over-budget $2.5 billion headquarters renovation to build a case for removing Powell for cause before his term ends next spring.
- It's part of an all-out assault on Powell that has expanded in recent weeks as the president has become enraged that the Fed isn't cutting rates.
Driving the news: Russ Vought, director of the Office of Management and Budget, sent a letter to Powell Thursday stating that President Trump "is extremely troubled by your management of the Federal Reserve System" and asking a series of pointed questions about what he called an "ostentatious overhaul" of the Fed's Washington, D.C., real estate.
State of play: The project includes the Fed's main headquarters on the National Mall and another historic building next door — a long-term effort by the Fed to consolidate its operations.
- Planning documents include high-end features that critics have seized upon, like a private elevator leading to an executive dining room and rooftop gardens with beehives.
- Sen. Tim Scott (R-S.C.) said in a hearing last month that "when senior citizens can barely afford Formica countertops, it sends the wrong message to spend public money on luxury upgrades that feel more like they belong in the Palace of Versailles than a public institution."
Yes, but: Powell told Congress that many of these high-end features are not included in the final project.
- "There are no new water features. There's no beehives and there's no roof terrace garden," Powell said, adding that "inflammatory things" in media coverage of the project — presumably referring to the New York Post, which has been all over the story — are "not in the current plan."
- Vought's letter posits that if those elements, included in the Fed's submissions to the National Capital Planning Commission approved in 2021, have indeed been scrapped, then the project is out of compliance with a law governing National Mall construction.
Between the lines: The subtext of the letter is clear — either Powell lied to Congress or the Fed has violated the National Capital Planning Act.
Of note: The project has been underway for years without Congressional outcry. It's hardly been a secret, either.
- Planning documents submitted to the NCPC were made public in 2021. The Wall Street Journal published a front-page story about cost overruns in 2023.
- The Federal Reserve Act quite explicitly gives the Fed control over its real estate, stating that the Board of Governors "may maintain, enlarge, or remodel any building or buildings" it has acquired or built "and shall have sole control of such building or buildings and space therein."
What they're saying: "The problem is not that the Fed should never be questioned about its budgets," wrote Peter Conti-Brown, at the University of Pennsylvania's Wharton School. "Those questions are well within the realm of appropriate oversight."
- "The problem is that these questions, from these sources, with these kinds of florid metaphors, are coming in a context of rank partisan hostility toward the Fed for precisely one reason: interest rates are not low enough to satisfy the sitting US president," he added.
- "To the extent that Fed independence counts for anything, it counts for this," wrote Conti-Brown.
