President Donald Trump demurred not once but twice about firing Federal Reserve Chair Jerome Powell on Thursday as the two officials toured the unfinished renovation project at Fed headquarters.
But if it were up to Trump, the project manager behind the extensive building renovation would get fired.
Trump was asked if the cost overruns of the — disputed — $3.1 billion renovation project is a fireable offense for Powell.
"I would love to see it completed. I don’t wanna put this in that category. It’s a very complex thing that could have been made simple," Trump said.
Later, Trump was asked about firing Powell if the Fed chair refuses to lower interest rates before his term expires in May 2026.
"To do that is a big move and I just don't think it's necessary," Trump told reporters. “I believe he’s going to do the right thing. ... It may be a little too late, as the expression goes.”
Trump also said he has two people in mind to replace Powell.
Trump sparred with Powell in front of cameras over the cost overruns of the renovation 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. "You just added in a third building is what that is."
"It's part of the overall," Trump answered.
“Do you expect any more additional cost overruns?” Trump asked, moving on.
“Don’t expect them,” Powell said. "We're ready for them. ... Expect to be finished in 2027. We're well along, as you can see."
Trump said in his career as a real estate developer he would fire someone for cost overruns, in this case the project manager.
"We'd like to see it get finished. In many ways it’s too bad it’s started. But it did start and it's been under construction for a long time. ... Looks like it's got a long way to go."
The president joked that he would back off Powell if he lowered interest rates, giving Powell a swift but playful slap on the back.
Trump and his allies say a $2.5 billion renovation of the Fed headquarters and a neighboring building reflects an institution run amok.
The Fed allowed reporters to tour the building before the visit by Trump, who, in his real estate career, has bragged about his lavish spending on architectural accoutrements that gave a Versailles-like golden flair to his buildings.
Trump's criticisms have put the Fed, a historically independent institution, under a harsh spotlight. Undermining its independence could reduce the Fed's ability to calm financial markets and stabilize the U.S. economy.
“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.
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 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.
Plans for the renovation were first approved by the Fed's governing board in 2017. The project then wended its way through several local commissions for approval, at least one of which, the Commission for Fine Arts, included several Trump appointees. The commission pushed for more marble in the second of the two buildings the Fed is renovating, known as 1951 Constitution Avenue, specifically in a mostly glass extension that some of Trump's appointees derided as a “glass box.”
Fed staff also said tariffs and inflationary increases in building material prices drove up costs. Trump in 2018 imposed a 25% duty on steel and 10% on aluminum. He increased them this year to 50%. Steel prices are up about 60% since the plans were approved, while construction materials costs overall are up about 50%, according to government data.
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.
Trump wants Powell to dramatically slash the Fed's benchmark interest rate under the belief that inflation is not a problem, but Powell wants to see how Trump's tariffs impact the economy before making any rate cuts that could potentially cause inflation to accelerate.
The renovation project has emerged as a possible justification by Trump to take the extraordinary step of firing Powell for cause, an act that some administration officials have played down given that the Fed chair's term ends in May 2026. White House budget director Russell Vought suggested in a July 10 letter to Powell that changes to the renovations in order to save money might have violated the National Capital Planning Act.
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.
Pushing Powell out also would almost certainly jilt global markets, potentially having the opposite effect that Trump wants as he pushes for lower borrowing costs.
Not everyone in Trump's administration agrees with the president's contention that Powell needs to resign.
“There’s nothing that tells me that he should step down right now,” said Treasury Secretary Scott Bessent, whom Trump has floated as a potential replacement for Powell, in a recent interview with Fox Business. “He’s been a good public servant.”
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.”
The Associated Press, Reuters and Newsmax contributed to this report.
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