Federal Reserve Chair Jerome Powell has asked the central bank’s inspector general to review the ballooning costs of the ongoing renovation of the Fed’s Washington, D.C. headquarters—a project that has drawn sharp criticism from the Trump administration.
Powell requested that Inspector General Michael Horowitz examine both the $2.5 billion budget and any additional issues he deems relevant, according to people familiar with the matter. Horowitz, previously the inspector general at the Justice Department, was appointed by Powell last month. He is known for his investigation into the FBI’s handling of the 2016 Russia probe, a report that was widely praised by President Trump and his allies.
The renovation has quietly proceeded for several years but has recently emerged as a new point of contention between Powell and the White House. Budget Director Russ Vought and the National Capital Planning Commission are investigating whether the project complied with the National Capital Planning Act and whether Powell’s congressional testimony about the costs was accurate.
Last month, Powell was pressed on the issue by Senate Banking Committee Chairman Tim Scott, after a New York Post article likened the building overhaul to the construction of a “Palace of Versailles”—a comparison Powell rejected during the hearing.
The probe comes amid renewed speculation that Trump might seek to remove Powell before his term expires in 2026. On Sunday, National Economic Council Director Kevin Hassett told ABC News that whether the president can fire the Fed chair “is a thing that’s being looked into.” The Federal Reserve Act allows removal “for cause,” but legal experts have long debated what that standard entails. Historically, it has not been interpreted to include policy disagreements, and the Supreme Court has signaled in recent cases that it may limit such removals.
Hassett is among the leading contenders to replace Powell. Other possible nominees include Fed governor Christopher Waller, former Fed governor Kevin Warsh, and Treasury Secretary Scott Bessent.
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