Updated 1w+ ago · Business

Fed Hands Renovation to Another Agency Amid Oversight Failures.

The Federal Reserve's inspector general found no grounds for a criminal referral and no administrative misconduct in the central bank's headline renovation project, according to a 120-page report released Wednesday.

$2.4 billion is the project's current price tag, up from a $921 million estimate in 2020.
Roughly $1 billion in cost overruns stemmed from management failures, not luxury design features.
Water features, marble and a garden terrace did not materially drive the cost increases, the IG found.
$346 million went to plumbing and air conditioning alone — triple the initial estimate.

Why it matters: The renovation became a flashpoint in the Trump administration's yearslong effort to pressure Powell to cut interest rates or resign. The Justice Department briefly opened a criminal probe, and a federal judge quashed its subpoenas in March, ruling they were a pretext for pressuring Powell.

The IG found the Fed never established a guaranteed maximum price, leaving it exposed as inflation and design changes pushed costs higher.
A 2023 shift from open to closed office layouts delayed the project and extended its exposure to inflation, the report found.

How 35 sources split on this story

Source landscape

Factuality

High

Mixed

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Strong LeftLeftLean LeftCenterLean RightRightStrong Right

Political Bias

Coverage by lean% of 35 sources

35 sources · 39 articles · 34% Center coverage

Where they split: Center coverage emphasizes management deficiencies as systemic; left-leaning outlets place heavier emphasis on the finding as a rebuttal to the Trump administration's accusations against Powell.

Center coverage, 12 sources: The center frames the report as a mixed outcome — clearing Powell of wrongdoing while documenting genuine institutional failures that warrant corrective action.

Reuters1w+The Fed's building renovations and Trump's push to oust Powell CNBC1w+Fed watchdog finds renovation failures, but no grounds for criminal referral Associated Press1w+No criminal wrongdoing in Federal Reserve building renovation, watchdog says, but it was mismanaged Axios1w+Fed watchdog clears former chair Powell in renovation probe CTV News1w+U.S. Fed watchdog finds no crimes in US$2.4B building renovation, only mismanagement Financial Times1w+Fed watchdog finds ‘deficiencies’ in $2.5bn headquarters renovation project NOTUS1w+Watchdog Says the Federal Reserve Building Renovation Was Mismanaged, Not Criminal - The Washington Sun PBS NewsHour1w+No criminal wrongdoing in Federal Reserve building renovation, watchdog says, but it was mismanaged The Hill1w+Fed watchdog finds no criminality in renovation probe USA Today1w+Watchdog finds no criminal misconduct in $2.5 billion Fed renovation WKBN Youngstown1w+Fed watchdog finds no crimes in $2.4B building renovation, only mismanagement Yahoo News1w+Fed watchdog clears Jerome Powell but says board mishandled renovation costs

Left coverage, 11 sources: The left frames the report as vindicating Powell and exposing the Trump administration's legal pressure campaign as unfounded and politically motivated.

CNN1w+Powell did not break the law with expensive Fed renovations that incensed Trump, report finds NBC News1w+Watchdog finds no criminality in Fed renovation that drew Trump’s scrutiny The Independent1w+No criminal wrongdoing in $2.5Bn Federal building renovation but it was mismanaged, watchdog finds Al Jazeera1w+US Fed watchdog finds no criminal wrongdoing in Powell-era renovation costs Los Angeles Times1w+Fed watchdog finds no crimes in $2.4-billion building renovation, only mismanagement MSNBC1w+Inspector general investigation discredits Trump’s claims about Federal Reserve renovations Politico1w+Watchdog finds no evidence of misconduct by Fed in HQ renovation Raw Story1w+Watchdog eviscerates Trump's claim that nemesis botched massive project The Boston Globe1w+Fed watchdog finds no criminal wrongdoing in building renovation The New York Times1w+Fed’s Watchdog Finds No Misconduct or Illegal Activity in Costly Renovations The Washington Post1w+Watchdog finds Fed mishandled renovations that Trump tried to oust Powell over

Right12 sources

Just the News1w+Fed hands HQ renovation to another agency amid scrutiny The Epoch Times1w+Review of Fed Renovation Finds Mismanagement Breitbart News1w+Fed Chair Warsh Moves to Remedy Serious Oversight Failures Found in Construction Report New York Post1w+Fed blasted by top watchdog over 'mismanaged' $2.5B 'Palace of Versailles' HQ work Newsmax1w+Watchdog Clears Powell, Says Fed Board Mishandled Costs NTD1w+Review of Fed Renovation Finds Management Failures, No Grounds for Criminal Referral The Center Square1w+Fed awarded $2B on renovation without a guaranteed price The Gateway Pundit1w+HERE WE GO: Internal Watchdog Says Federal Reserve’s Renovation Was Mismanaged But Found No Criminal Wrongdoing in $2.5 Billion Boondoggle * The Gateway Pundit * by Cristina Laila The Washington Times1w+IG report finds no misconduct around Fed building renovation Washington Examiner1w+Federal Reserve watchdog finds no illegal conduct from Jay Powell in building renovations WND1w+‘This is Jerome Powell’s fault’: Watchdog says Fed’s $2.5 billion boondoggle renovation was mismanaged, not criminal * WorldNetDaily * by Cristina Laila, The Gateway Pundit ZeroHedge1w+Fed Watchdog Finds No Crimes In $2.4 Billion Renovation, Just Everything Else

What’s next: Warsh agreed to all seven IG corrective actions, including an independent contractor audit.

The GSA will now serve as project executive, effective immediately, Warsh said.
Construction is expected to run through December 2027, three years past its original completion date.
Whether the Justice Department or U.S. Attorney Jeanine Pirro will take any further action following the IG's findings.
Whether the Trump administration will renew pressure on Powell in his remaining role as a Fed governor.
How involving the GSA in Fed operations may affect the central bank's operational independence.