Powell defends Fed’s $2.5B headquarters renovation

Federal Reserve Chair Jerome Powell has pushed back against sharp criticism from the White House over the central bank’s $2.5 billion renovation of its historic Washington, D.C., headquarters. On Thursday, Powell formally responded to a letter from Russell Vought, director of the White House Office of Management and Budget (OMB), who accused Powell of wasteful spending and mismanagement of the project. Vought had issued Powell a deadline of seven days to answer a series of questions about the renovation, which had exceeded its original budget. The letter was highly unusual and personal, underscoring increasing tensions between the Federal Reserve and allies of President Donald J. Trump. But instead of piling on in kind, Powell’s response was measured. He also pointed Vought to a new section of the Federal Reserve’s website, which offers an expanded description of the project, its budgets, schedules, and design choices. “The Board believes it is of the utmost importance to provide transparency for our decisions and to be accountable to the public,” Powell wrote. He did not respond to Vought’s political jabs, including accusing Powell of “grossly mismanaging the Fed” or having misled Congress in testimony last month. Fed denies ‘luxury upgrades’ claims Among the more sensational claims in Vought’s complaint was the accusation that the renovation had decked out the building with such luxury amenities as private elevators, exclusive dining rooms, and a rooftop garden. Powell strongly denied these claims . A Federal Reserve official stated that the renovation plans do not include private elevators or VIP lunchrooms. The official also clarified that the roof space would not be used as a garden or for outdoor entertainment, but would house essential mechanical equipment. Powell said the renovation responds to aging infrastructure and bona fide safety issues. Some buildings from the early 20th century need seismic reinforcements, modern electrical and plumbing systems, and augmented cybersecurity defenses. He added that the renovation is intended to conform to federal environmental standards and enhance accessibility under the Americans with Disabilities Act. Powell’s necessary and fiscally prudent spending would guarantee that the headquarters will remain safe, functional, and operational for many years. He also said that the Federal Reserve is not usually beholden to the National Capital Planning Commission (NCPC) – the entity that reviews major public developments in D.C. However, Powell said the Fed willingly worked with the NCPC to ensure the renovation complied with high design and planning standards. Trump allies question Powell’s leadership Even with Powell’s modulated response, the blowback from Trump allies will likely escalate. Vought said Thursday that he plans to visit the office in person to review the project. The building is several blocks from the White House. That same day, Rep. Anna Paulina Luna (R-FL) said she planned to urge the US Department of Justice to investigate whether Powell had provided false or misleading information to a congressional committee regarding the scope and status of the renovation project. The criticism is part of a larger bid to undercut Powell’s leadership. Trump, who nominated Powell only to lash out at him later, has often hammered the Fed Chair for monetary policy. Trump has criticized Powell for the US central bank’s refusal to cut rates despite inflation having remained tame. In his letter , Vought stated that the President had grown increasingly concerned that Powell was unwilling to support his public statements with concrete actions . He also accused Powell of moving forward with an expensive renovation project rather than focusing on the nation’s economic challenges. On the other hand, Powell made it plain that the renovation is not a luxury but a long-deferred investment in infrastructure that underpins the Fed’s core operations, including monetary policy, financial oversight, and payment systems. Powell’s reply, however, won’t settle the controversy. It could signal the start of a broader effort to pressure him and steer the Fed in a different direction in the coming months. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now

Source: Cryptopolitan