President Donald Trump may have found a way to oust Federal Reserve Chairman Jerome Powell, whom he has long criticized for the Fed keeping interest rates too high despite inflation falling. On Tuesday, he called Powell’s $700 million overspend on renovating the central bank a “fireable offense.”
The president escalated his rhetoric against Powell over an extension to the Fed’s headquarters in Washington, D.C., which cost roughly $700 million more than its initial receipt of under $2 billion. The project ended up costing $2.5 billion, significantly more than expected.
“I think he’s terrible… But the one thing I didn’t see him as a guy that needed a palace to live in,” Trump told reporters. “But the one thing I would have never guessed is that he would be spending two and a half billion dollars to build a little extension onto the Fed.”
Office of Management and Budget Director Russ Vought opened an inquiry into the matter last week.
“Now up to $2.5 billion, roughly $700 million over its initial cost,” Vought posted on social media. “These renovations include terrace rooftop gardens, water features, VIP elevators, and premium marble. The cost per square foot is $1,923 — double the cost for renovating an ordinary historic federal building. The Palace of Versailles would have cost $3 billion in today’s dollars!”
The renovation was approved by the Fed’s Board of Governors in 2017. It initially cost about $1.9 billion in 2019 and later ballooned to around $2.5 billion because of design changes, differences between original estimates and actual costs, and “unforeseen conditions,” the Fed says on its website.
When a reporter asked if the expensive renovation was a fireable offense, Trump replied, “I think it sort of is.”
Powell recently drew the ire of the White House when he said the Fed would hold off on cutting interest rates for now due to concerns over tariffs driving up prices. Trump says he wants the interest rates to be at or below 1%.
”We should be at 1%,” he said on Monday. “We should be less than 1%.”
Trump previously nicknamed the Fed chairman “Too Late Powell” for his cautious approach to lowering interest rates.
Powell was appointed during Trump’s first term in 2017. Following the president’s attacks, Powell could lose his job. Trump is reportedly considering several replacements, including Treasury Secretary Scott Bessent.
“He’s an option, and he’s very good,” Trump said of Bessent. “Well, he’s not, because I like the job he’s doing, right?”
Bessent confirmed this week that the “formal process” to find Powell’s successor is already underway.
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“There are a lot of good candidates inside and outside the Federal Reserve,” the treasury secretary said.
Trump could name Powell’s replacement as early as this fall, the Wall Street Journal reported last month. Powell’s term as chairman ends in May 2026, though he could technically remain on the Fed’s Board of Governors until January 2028.
