White House budget director Russell Vought said in a social media post that Jerome Powell “has grossly mismanaged the Fed” as he published a letter sent to the central bank chairman raising concerns about renovations of the institution’s Washington, D.C., offices.
“The president is extremely troubled by your management of the Federal Reserve system,” wrote Vought, director of the Office of Management and Budget. “Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington DC headquarters.”
Powell’s testimony about the renovations before a Senate committee last month, according to Vought, raised questions about the project’s compliance. Vought cited what he called cost overruns of more than $700 million, plans for rooftop terrace gardens, VIP private dining rooms and elevators, water features, and marble.
Vought also asked Powell a series of questions about the project and asked for responses in seven days, noting that the “administration takes this matter very seriously.”
The letter from Vought is the latest in a series of new pressure points on Powell, who has become the target of President Trump’s ire for months now. The president has called repeatedly for the chairman to lower interest rates.
In the last two weeks, Trump has said twice that Powell should resign immediately. On Thursday Trump took to Truth Social and while praising Nvidia (NVDA) he also called again for the Fed to lower rates.
“COUNTRY IS NOW “BACK.” A GREAT CREDIT! FED SHOULD RAPIDLY LOWER RATE TO REFLECT THIS STRENGTH. USA SHOULD BE AT THE “TOP OF THE LIST.” NO INFLATION!!!”
On Tuesday, he said in response to a question from a reporter that “it’s OK with me” if Congress investigates the Fed chairman.
The reporter had asked Trump about accusations made by some Republican lawmakers that Powell had misled Congress about renovations at the Fed’s headquarters building.
“I think he is terrible,” Trump added.
‘Just inaccurate’
The comments that Powell made about the headquarters came as he testified before Senate lawmakers on June 25.
Republican senators asked him about media reports that described the expenses and features of the Fed renovation project and cited allegations that the cost of the renovation has increased by more than 30% to $2.5 billion.
Citing media reports, GOP senators said plans showed the renovated buildings will include rooftop garden terraces, ornate water features, new elevators that drop board members off directly in their VIP dining suite, and use of white marble with a private art collection in the basement.
Powell called the media reports quoted by senators “misleading and inaccurate,” saying that there was no VIP dining room nor new marble. Powell stressed that there are no new water features, no beehives, no rooftop terrace gardens, and no special elevators.
“So all the sort of inflammatory things that the media said are either not in the current plan or just inaccurate,” said Powell.
Vought in his letter said to Powell that his testimony raises serious questions about the project’s compliance with the National Capital Planning Act, which requires that projects like the Fed headquarters be approved by the National Capital Planning Commission (NCPC).
The NCPC approved a plan in 2021, Vought said, but Powell’s testimony “appears to reveal the project is out of compliance with the approved plan.”
That, he said, would be a violation of the National Capital Planning Act and require the Fed to halt construction and obtain a new approval from NCPC.
Though section 10.3 of the Federal Reserve Act says the Fed has jurisdiction over its own buildings. The statute says the central bank shall have the power “…to provide for the acquisition by the Board in its own name of such site or building in the District of Columbia as in its judgment alone shall be necessary for the purpose of providing suitable and adequate quarters for the performance of its functions…”
Vought said Powell’s comments led to a need for increased oversight from OMB in conjunction with the NCPC, a group that says on its website that it “represents federal and local constituencies with a stake in planning for the nation’s capital.”
The president appoints three citizens, including the chair, to that commission.
One of those appointees, James Blair, said on X on Thursday, just hours after being sworn in, “Today I expressed my grave concern with the public allegations by others that Federal Reserve Chairman Powell was not honest with the Senate Banking Committee in his late June testimony about design features of the Federal Reserve’s Headquarters Renovation Project.”
Blair is a longtime Trump ally currently serving as Trump’s deputy chief of staff, where he has been involved in issues like passing the reconciliation package after a stint as political director of his 2024 campaign.
Blair added in his posts about Powell that he “shared with my co-commissioners that I would be requesting a review of all previous and current building plans for Fed’s HQ renovation project and will be requesting a site visit to the project immediately.”
The chair of the commission is White House staff secretary Will Scharf, who was previously one of Trump’s personal attorneys and has gained attention only as his current role often has him handing Trump executive orders to be signed.
Another member of Trump’s administration, Federal Housing Finance Agency Director Bill Pulte, has called for Congress to investigate Powell over the statements he made to Senate lawmakers about the renovations.
“I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed ‘for cause,'” Pulte has said in a post on X.
‘Not permitted under the law’
The increased pressure on Powell from the White House comes as the Trump administration is eager for Powell to exit the Fed as it considers its options for replacing the chair and putting its own imprint on the powerful central bank board that helps decide whether interest rates go up or down.