President Donald Trump has repeatedly called on Federal Reserve Chairman Jerome Powell to slash interest rates.President Donald Trump has repeatedly called on Federal Reserve Chairman Jerome Powell to slash interest rates.
President Donald Trump‘s budget chief on Thursday said that Federal Reserve Chairman Jerome Powell “has grossly mismanaged the Fed” and suggested he had misled Congress about a pricey and “ostentatious” renovation of the central bank’s headquarters.
The broadside by Office of Management and Budget Director Russell Vought opened up a new front in Trump’s war of words against Powell.
Trump has repeatedly called on the Fed chairman to cut interest rates, without success. He reportedly has considered firing Powell and, more recently, publicly naming the chairman’s replacement months earlier than the end of Powell’s term next spring.
Vought’s letter raises the question of whether Trump will seek to remove Powell for cause, at least ostensibly.
But the Supreme Court in a recent decision strongly suggested that Federal Reserve board members have special protection from being fired by a president.
“While continuing to run a deficit since FY23 (the first time in the Fed’s history), the Fed is way over budget on the renovation of its headquarters,” Vought wrote in a post on the social media site X.
“Now up to $2.5 billion, roughly $700 million over its initial cost,” Vought wrote. “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!”
Vought’s tweet linked to a letter he sent Powell that referenced the Fed boss’s June 25 testimony before the Senate Banking Committee.
“Your testimony raises serious questions about the project’s compliance with the National Capital Planning Act, which requires that projects like the Fed headquarters renovation be approved by the National Capital Planning Commission,” Vought wrote.
“The plans for this project called for rooftop terrace gardens, VIP private dining rooms and elevators, water features, premium marble, and much more,” he wrote.
But Powell, in his testimony, said, “There’s no VIP dining room. There’s no new marble. There are no special elevators. There are no new water features. There’s no beehives and there’s no roof terrace gardens,” Vought wrote.
“Although minor deviations from approved plans may be inevitable, your testimony appears to reveal that the project is out of compliance with the approved plan with regard to major design elements,” Vought wrote.
“This would bring the project outside of the NCPC’s approval and thus in violation of the NCPA, and require the Fed to immediately halt construction and obtain a new approval from the NCPC before proceeding any further.”
The letter asked Powell to respond to 11 questions about the renovation project within seven business days.
The Federal Reserve declined to comment on Vought’s letter.
— Additional reporting by CNBC’s Jeff Cox
