President Donald Trump threatened to sue Federal Reserve Chairman Jerome Powell over the central bank’s costly renovation project.
The U.S. Attorney’s Office for the District of Columbia has opened a criminal investigation into Federal Reserve Chairman Jerome Powell, focusing on the renovation of the central bank’s Washington headquarters and whether he was truthful in his testimony in Congress about the project.
Officials told The New York Times, which first reported the investigation, that it centers on whether Powell accurately characterized the scope and cost of the renovation during congressional appearances.
THE FED’S $2.5BILLION RENOVATION IS PRESIDENT TRUMP AND TEAM
Jerome Powell, Chairman of the US Federal Reserve, during the open meeting of the Federal Reserve Board in Washington, DC, US, on Wednesday, June 25, 2025. (Al Drago/Bloomberg via Getty Images/Getty Images)
Powell confirmed that the Federal Reserve had been served. He said he respected the rule of law and congressional oversight, but described the Justice Department’s move as “unprecedented” and politically motivated.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said in a video statement Sunday evening.
“The threat of criminal prosecution is a result of the Federal Reserve setting interest rates based on our best estimate of what will benefit the public, rather than following the president’s preferences,” he added.
U.S. President Donald Trump and Federal Reserve Chairman Jerome Powell speak during a tour of the Federal Reserve Board building, which is currently under renovation, in Washington, DC, July 24, 2025. (REUTERS/Kent Nishimura/Reuters)
Tensions between president Donald Trump and Powell have been silent on the central bank’s interest rate decisions and more broadly monetary policy. Trump has ordered the Fed to cut interest rates, which he said could save the nation “hundreds of billions of dollars.”
Powell kept the benchmark interest rate at 4.25% to 4.5% as the Fed took a wait-and-see approach to assess the impact of Trump’s sweeping tariffs. Although the central bank has since cut rates, Trump’s attacks on Powell, whom he appointed in 2017, have taken on an increasingly personal tone, including the use of derisive nicknames.
A LOOK AT THE BATTLE BETWEEN TRUMP AND POWELL OVER FED POLICY
This tense relationship increasingly extends beyond monetary policy.
The renovation of the from the Federal Reserve two large office buildings in Washington’s Foggy Bottom neighborhood cost an estimated $2.5 billion and are financed by the central bank itself, not taxpayers.
The Fed is self-financing and does not rely on appropriations from Congress to cover its operating costs, including employee salaries, facility maintenance and current renovations. The main income comes from interest on government bonds and fees charged to financial institutions.
The grand atrium of the Marriner S. Eccles Federal Reserve Building during a media tour of the renovation of the central bank’s headquarters in Washington, DC, on July 24, 2025. (Andrew Harnik/Getty Images/Getty Images)
In June 2025, Powell told members of the Senate Banking Committee: “There is no new marble. There are no special elevators. They are old elevators that have been there. There are no new water features. There are no beehives and there are no roof garden terraces.”
Powell also told lawmakers that no one “wants to do a major renovation of a historic building during their term.”
“We decided to take it on because, honestly, when I was administrative governor, before I became chairman, I started to understand how desperately the Eccles Building really needed some serious renovation,” Powell said, adding that the building is “not really safe” and not waterproof.
TOP TRUMP OFFICIAL TO INSPECT FED’S $2.5B RENOVATION AGAINST COST STUDY
The two-story main boardroom of the Marriner S. Eccles Federal Reserve Building during a media tour of the central bank’s headquarters renovation in Washington, DC, on July 24, 2025. (Andrew Harnik/Getty Images/Getty Images)
He also said the cost overruns are partly due to unexpected construction challenges and inflation in the country.
The project is expected to be completed in fall 2027, with Washington employees expected to begin working in the building in March 2028.
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Trump has previously threatened legal action over the renovations and mocked the project’s cost and design.
“They’re building a basement in the Potomac River. I could have told them this is very hard to do, and it doesn’t work, and it’s very expensive,” Trump said. “But they are worth $4 billion, led by this clown,” he added in November, referring to Powell.
The project is scheduled for completion in the fall of 2027, with Washington workers expected to occupy the building in March 2028.
