President Trump’s battle with the Federal Reserve is intensifying, with his administration now eyeing a $2.5 billion renovation of the Fed’s Washington, D.C., headquarters as potential legal ammunition against Fed Chair Jerome Powell. The move represents a potential shift which could reshape U.S. monetary policy and pose a direct challenge to the central bank’s independence.
The president has made his frustration with Powell for refusing to cut interest rates very public; but what had largely been a rhetorical campaign may now be entering a more legally actionable phase — one that could have far-reaching consequences for the global financial system, according to Axios.
Trump has previously stated that he would not try to remove Powell until his term ends next year. However, investigating the headquarters renovation may provide new leverage for the White House to remove a key obstacle. According to two sources familiar with internal discussions, Trump’s appointees are working to establish legal justifications to fire Powell “for cause,” alleging that the renovation plan may have included unauthorized changes and misleading testimony to Congress.
At the heart of the administration’s argument is the claim that the Federal Reserve altered its renovation plans without approval from the National Capital Planning Commission (NCPC), thereby violating the National Capital Planning Act. Last week, a letter was sent from Office of Management and Budget Director Russ Vought to Powell. Vought’s letter suggested that the Fed had made significant changes to the original plans approved by the NCPC in 2021.
Powell, however, told Congress last month that the project did not include several luxury features that have come under scrutiny. In response to mounting criticism, the Fed over the weekend published a public FAQ explaining the necessity of the renovation, addressing the cost, and countering what it called “exaggerated reports” of luxury additions. The Fed maintains that under the Federal Reserve Act, the Board of Governors has sole authority over its real estate and that cooperation with the NCPC is purely voluntary.
Still, the administration’s efforts to take control of the NCPC signal a broader strategy. Trump has recently installed political allies — including the White House staff secretary — to the commission, traditionally composed of architects and historical preservationists. These new members have quickly aligned with the White House’s stance on the Fed project.
NCPC Chair Will Scharf, who previously served as Trump’s personal lawyer, stated during a commission meeting last week that the renovation plan contains “serious deviations” from the version previously approved. Another Trump-appointed commissioner, Michael Blair, described the building as looking like a “Taj Mahal near the National Mall,” according to Axios.
