Federal Reserve Chair Jerome Powell has asked the central bank’s watchdog to scrutinize renovations of the Fed’s headquarters, in response to growing criticism from the Trump administration of the plan.
Powell called on the Fed’s inspector-general, Michael Horowitz, to examine the project’s cost, which has ballooned to $2.5 billion, as well as any other aspect he deems appropriate, according to a person familiar with the request.
Horowitz, who was appointed by Powell last month, was previously the inspector-general for the Justice Department, where he won praise from President Donald Trump and his supporters for uncovering problems in the FBI’s handling of the investigation into potential collusion between Trump’s 2016 campaign and Russia.
Axios earlier reported news of Powell’s request to the IG.
Speculation has grown that Trump, who has clashed with Powell for refusing to cut interest rates, might try to use the renovations to remove the Fed chief “for cause,” as allowed by statute.
Still, it is unclear what type of behavior would fall under that standard. It has generally been interpreted to mean that the president cannot fire Fed board members over policy disagreements, and the Supreme Court signaled in a recent order that it might block a move to remove the Fed chair without cause.
The headquarters renovation, which has been underway for multiple years, is a new front in the administration’s criticism of the Fed. Powell was asked at a hearing last month by Senate Banking Chair Tim Scott about the project after a New York Post article characterized it as akin to the “Palace of Versailles,” a characterization the Fed chief disputed.
White House Budget Director Russ Vought — along with the National Capital Planning Commission — is investigating Powell over both the testimony he provided to Congress and questions about whether the construction project adhered to the National Capital Planning Act.
National Economic Council Director Kevin Hassett said on ABC News on Sunday that the question of whether Trump can fire the Fed chair is “a thing that’s being looked into.” Hassett is one of four candidates to replace Powell when his term ends next year, according to people familiar with the administration’s deliberations.
