US Federal Reserve Chair Jerome Powell fights back in 'renovation clash' with White House through strong letter
In a letter to Vought, Powell stressed the renovation addresses critical safety needs in the 90-year-old building, including removing toxic asbestos and updating dangerous electrical systems. President Trump has called the project "disgraceful" and suggested it could justify firing Powell.
"As explained on the Board's public website, we take seriously the responsibility to be good stewards of public resources as we fulfill the duties given to us by Congress on behalf of the American people," Powell wrote in his letter to Office of Management and Budget Director Russell Vought, according to a Reuters report.
'We have taken great care to ensure the project is carefully overseen since it was first approved by the Board in 2017,' Powell continued.
The Fed headquarters renovation costs jumped from $1.9 billion to $2.5 billion due to unexpected dangers. Builders found far more cancer-causing asbestos than predicted, toxic soil contamination, and underground water issues requiring costly fixes.
Construction inflation also spiked prices for steel and cement by 30% after the project began in 2019. Powell noted these challenges in his response: 'We take seriously being good stewards of public resources'. The Fed also canceled plans to renovate a third building to control expenses.
Trump officials have seized on the renovation to pressure Powell over interest rates. Vought demanded answers within seven days about the project's "lavish" features and compliance issues.
Trump also placed allies on the National Capital Planning Commission, which oversees federal buildings. Commissioner James Blair accused Powell of misleading Congress about design changes, potentially giving Trump "cause" to fire him . Powell has asked the Fed's inspector general to independently review the renovation costs amid the attacks.
The renovation fight threatens the Fed's independence as Powell resists Trump's demands for rate cuts.
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