President Donald Trump and Federal Reserve Chair Jerome Powell found themselves at odds during a visit to the Fed’s headquarters on Thursday. The disagreement centered on the rising costs of renovations to the building, with Trump claiming the expenses had ballooned to $3.1 billion. He remarked, “So we’re taking a look, and it looks like it’s about 3.1 billion. Went up a little bit — or a lot.”
Powell, visibly skeptical, countered by saying he hadn’t heard such figures from anyone at the Fed. He suggested that the costs Trump mentioned were related to a different building that had been completed five years earlier.
However, the narrative shifted the following day when Mark Paoletta, General Counsel of the Office of Management and Budget, asserted on social media that Trump was indeed correct about the renovation costs. Paoletta shared that the Federal Reserve’s 2022 budget had allocated $1.4 billion for part of the headquarters project, with a total budget of $1.8 billion for all three buildings. He indicated that the latest budget for 2025 now shows costs for the renovations at $2.5 billion, resulting in a significant overrun and bringing the total to $3.1 billion.
Paoletta emphasized that Trump’s visit aimed to encourage Powell to complete the renovation without further cost overruns and to expedite the project.
The renovation has drawn criticism, particularly from Russell Vought, Director of the Office of Management and Budget. In a letter to Powell, Vought expressed concern about the management of the Federal Reserve and the lavish nature of the renovation project. He referenced Powell’s testimony before the Senate Banking Committee, where Powell downplayed extravagant features that had been rumored, such as VIP dining rooms and new marble installations.
Vought pointed out discrepancies in Powell’s statements about the renovation’s necessity, noting that the Eccles building had undergone a significant renovation between 1999 and 2003.
Tensions have been high as Powell’s term approaches its end in May 2026. Trump has expressed frustration with Powell’s reluctance to lower interest rates, hinting at the possibility of firing him. Despite this, Powell has maintained that he would not resign if asked by Trump, asserting his independence as Fed Chair.
The ongoing debate over the Federal Reserve’s renovation and its costs highlights the broader tensions between the Trump administration and the central bank, as both sides grapple with fiscal responsibility and economic management.
