“The Big Money Show” panel weighs in on Jerome Powell’s decision to stay at the Federal Reserve as tensions rise with President Donald Trump and new Chairman Kevin Warsh over interest rate policy.
The inspector general’s investigation into the costly Federal Reserve renovation project determined there was no administrative misconduct after cost overruns prompted an investigation into former Federal Reserve Chairman Jerome Powell amid criticism from President Donald Trump.
The Office of the Inspector General of The Federal Reserve The Board of Governors began investigating cost overruns at Powell’s request in July 2025. Powell, then Fed chairman, revealed in January that the Justice Department had opened a criminal investigation into his June 2025 testimony before Congress about the renovation project. The U.S. Attorney’s Office closed the investigation in April while the inspector general continued to investigate the matter.
“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 pursuant to the Inspector General Act,” the IG report said.
“Furthermore, although our report highlights deficiencies in the management of the renovation project, resulting in our recommendations for corrective action pursuant to the Inspector General Act, we did not identify administrative misconduct during our evaluation,” the report adds.
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The inspector general found no administrative misconduct in the handling of the Federal Reserve’s renovation project after then-Fed Chairman Jerome Powell was criticized by President Donald Trump. (Kent Nishimura/Reuters)
President Donald Trump Last year, Powell repeatedly criticized the plan, accusing it of “gross incompetence” and threatening to sue the then-Fed leader. The president also said he was considering firing Powell over the project and urged him to resign, while calling on the central bank to cut interest rates.
In January, U.S. Attorney for the District of Columbia Jeanine Pirro subpoenaed the Fed’s board of governors regarding Powell’s testimony on the project.
Powell responded by releasing a video statement claiming the “unprecedented” move was politically motivated, arguing that “the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the President’s preferences.”
POWELL REQUESTS GI REVIEW AFTER TRUMP ADMINISTRATION FLAGS COSTAL RENOVATION OF FED BUILDING
The Marriner S. Eccles Federal Reserve Building serves as the central bank’s headquarters. (Al Drago/Bloomberg via Getty Images)
The controversial project involved the renovation of the Fed’s Marriner S. Eccles and 1951 Constitution Avenue NW buildings. The approved budget increased from $1.317 billion in February 2020 to $2.381 billion in December 2024, which the IG said is the most recently revised renovation budget by the Fed Board. The Fed’s board also received a proposed construction cost of $2.135 billion in January from its construction director.
Critics of the project took issue with a number of design elements in the renovation project, such as the inclusion of a garden terrace, marble and water features. However, the IG “determined that these features did not contribute significantly to subsequent increases in construction costs.”
The Fed attributed part of the cost increase to rising costs of construction materials, equipment and labor; modifications to original designs after consultation with reviewing agencies; and unforeseen problems like more asbestos than expected, contaminated soil, and a higher water table than expected.
Trump and Senate Banking Chairman Tim Scott, R-S.C., made a high-profile visit to the construction site with Powell last summer. (Andrew Caballero-Reynolds/AFP)
The IG report acknowledges that these issues all contributed to the overall cost increase, but notes that project management and contract execution decisions also played a role. Among those decisions was not to establish a guaranteed maximum price contract that would make the contractor liable for cost overruns.
Additionally, the IG noted that substantial cost increases were caused by four price bids, three of which did not receive at least three bids, and said the Fed did not effectively use its external construction representative or have sufficient internal governance of the project. He also noted that the construction phase of the project is expected to be completed by December 2027.
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Trump appointed Powell to chair the Fed during his first term as president. (Saul Loeb/AFP via Getty Images)
President Trump responded to the IG report in a post on his Truth Social platform, saying that “too late” Powell should be forced to resign from the board. He can’t run a building, and he certainly shouldn’t be allowed to run his high interest rate policy (only on “TRUMP!”). “
“I have asked Attorney General Todd Blanche to study the report and determine what to do about a relatively small housing complex that is hundreds of millions of dollars over budget and is now going to cost, according to the report, at least $2.5 billion, with no end in sight,” Trump continued, criticizing the handling of the project.
“I could have done a much better renovation for $25 million, completely retaining the MAGNIFICENCE of the structure, and still had money left,” Trump claimed. “They have completely destroyed the beauty and glorious history of the building.”
“This is Jerome Powell’s fault, and he should be forced to resign IMMEDIATELY! If he does not resign, he should be prosecuted, at the highest levels, by the United States government for either corruption or incompetence, both of which are completely unacceptable…And no, I do not want this building named after President Donald J. Trump, ME! Thank you for your attention to this matter,” the president wrote.
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Fed Chairman Kevin Warsh took over from Powell in May after his nomination was cleared following the Justice Department’s decision to drop its investigation into Powell, sparking resistance to Warsh’s nomination in the Senate.
Powell remains a member of the Fed’s Board of Governors after indicating he would stay on until the investigation into him is finally concluded due to his concerns about threats to monetary policy independence.
The Warsh-led Federal Open Market Committee voted unanimously earlier this month to raise interest rates for the first time since 2023 due to stubborn inflation.
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