What they say: “At no time during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the Attorney General of the United States,” the Office of Inspector General wrote in the report.
- The watchdog added that it “did not identify any administrative misconduct during our assessment.”
Yes, but: Although the report exonerates Powell, it criticizes the Fed’s management and oversight of the project because construction costs more than doubled to $2.5 billion.
- The Fed “failed to take many actions available to it that could have better controlled costs and mitigated some of the significant increases in construction costs,” the report said.
Flashback: The renovation has become a flashpoint in President Trump’s broader campaign against Powell and the Fed.
- Trump visited the construction site with Powell in July 2025 and publicly challenged him on the project’s soaring costs.
Zoom out: The Justice Department’s investigation focused on Powell’s testimony before Congress in June 2025 about the renovation and its rising costs.
- Powell has denied any wrongdoing and maintained at the time that the investigation was part of a broader effort to pressure the Fed on interest rates.
- The DOJ closed the investigation in April as the Fed’s inspector general continued its review.
Zoom: The watchdog said that inflation alone could not explain the higher costs of the project.
- For example, the report shows that two major mechanical, electrical and plumbing contracts more than tripled to $539 million from a previous estimate of $178 million, far outpacing the broader increase in construction costs.
To note: The report says key design features that drew attention from Congress and other critics — including marble, water features and a garden terrace — did not contribute significantly to the project’s rising costs.
- The Fed scrapped four new fountains planned for June 2025 because officials were concerned that “external stakeholders, such as Congress and the media, were raising concerns about the design,” according to the report.
Point of friction: The president, in a Truth Social article responding to the report, said Powell “should be forced to resign IMMEDIATELY! If he does not resign, he should be prosecuted, at the highest levels, by the United States government.”
What to watch: Powell remained on the Fed board after his term as chairman ended in May — an unusual move that he said was related to the investigation’s conclusion.
Editor’s note: This story has been updated with comments from President Trump.
Gn bussni
