President Donald Trump publicly scorned Federal Reserve Chair Jerome Powell on Thursday for the cost of an extensive building renovation as the two officials began a tour of the unfinished project.
Trump said the project cost $3.1 billion, much higher than the Fed’s $2.5 billion figure, while Powell, standing next to him, silently shook his head.
“This came from us?” Powell said, then figuring out that Trump was including the renovation of the Martin Building that was finished five years ago.
“Do you expect any more additional cost overruns?” Trump asked.
“Don’t expect them,” Powell said.
Trump said in his career as a real estate developer he would fire someone for cost overruns. The president joked that he would back off Powell if he lowered interest rates.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
WASHINGTON (AP) — The Federal Reserve, known for its tight lips, structured formality and extraordinary power to shape the global economy, opened up a costly building renovation Thursday to reporters and President Donald Trump.
“This stubborn guy at the Fed just doesn’t get it — Never did, and never will,” Trump said Wednesday on Truth Social. “The Board should act, but they don’t have the Courage to do so!”
On Thursday, reporters wound through cement mixers, front loaders, and plastic pipes as they got a close-up view of the active construction site that encompasses the Fed’s historic headquarters, known as the Marriner S. Eccles building, and a second building across 20th Street in Washington.
Fed staff, who declined to be identified, said that greater security requirements, rising materials costs and tariffs, and the need to comply with historic preservation measures drove up the cost of the project, which was budgeted in 2022 at $1.9 billion.
The staff pointed out new blast-resistant windows and seismic walls that were needed to comply with modern building codes and security standards set out by the Department of Homeland Security. The Fed has to build with the highest level of security in mind, Fed staff said, including something called “progressive collapse,” in which only parts of the building would fall if hit with explosives.
Sensitivity to the president’s pending visit among Fed staff was high during the tour. Reporters were ushered into a small room outside the Fed’s boardroom, where 19 officials meet eight times a year to decide whether to change short-term interest rates. The room, which will have a security booth, is oval-shaped, and someone had written “oval office” on plywood walls.
The Fed staff downplayed the inscription as a joke. When reporters returned to the room later, it had been painted over.
During the tour, Fed staff also showed the elevator shaft that congressional critics have said is for “VIPs” only. Powell has since said it will be open to all Fed staff. The renovation includes an 18-inch (45-cm) extension so the elevator reaches a slightly elevated area that is now accessible only by steps or a ramp. A planning document that said the elevator will only be for the Fed’s seven governors was erroneous and later amended, staff said.
Fed staff also pointed to the complication of historic renovations — both buildings have significant preservation needs. Constructing a new building on an empty site would have been cheaper, they said.
As one example, the staff pointed reporters to where they had excavated beneath the Eccles building to add a floor of mechanical rooms, storage space, and some offices. The Fed staff acknowledged such structural additions underground are expensive, but said it was done to avoid adding HVAC equipment and other mechanics on the roof, which is historic.
The Fed has previously attributed much of the project’s cost to underground construction. It is also adding three underground levels of parking for its second building. Initially the central bank proposed building more above ground, but ran into Washington, D.C.’s height restrictions, forcing more underground construction.
Fed staff said there were just two changes to the plans they had submitted to the National Capital Planning Commission, and neither were significant enough to warrant a re-submission of the plans. They removed a seating area on the roof of the Eccles building, because it was an amenity, and two water features in front of the second building, which they said saved money.
More recently, Trump has said he has no plans to oust Powell, which could be illegal based on a note in a May Supreme Court ruling. The Supreme Court found that Trump had the power to remove board members of other independent agencies, but indicated that a Fed chair could only be removed for cause.
Not everyone in Trump’s administration agrees with the president’s contention that Powell needs to resign.
When asked last week if the costly rebuilding could be grounds to fire Powell, Trump said, “I think it sort of is.”
“When you spend $2.5 billion on, really, a renovation,” Trump said, “I think it’s really disgraceful.”
