A scheduled visit to review the Federal Reserve’s extensive headquarters renovation in Washington turned into a tense exchange between President Donald Trump and Fed Chair Jerome Powell, highlighting their ongoing disagreements over the project’s ballooning costs.
Last week, President Trump suggested that Powell’s management of the multibillion-dollar renovation could be grounds for dismissal. However, during Thursday’s site visit, Trump indicated that he does not currently intend to fire the Fed chair.
The two leaders stood side by side at the construction site — both wearing hard hats — as Trump asserted the costs had surged to $3.1 billion. Powell expressed surprise at the figure, responding that he hadn’t heard that estimate from anyone at the Fed. The president then handed Powell a document, prompting him to put on his glasses and read it.
“You just added in a third building is what that is — that’s a third building,” Powell remarked, referencing the Martin Building.
“Well, I know but it’s a building that’s being built,” Mr. Trump replied.
“No — it was built five years ago. We finished Martin five years ago,” Powell clarified.
“It’s part of the overall work,” Trump responded.
“It’s not new,” Powell reiterated.
When Trump inquired about the likelihood of further cost overruns, Powell replied that he does not anticipate any. The project, which began several years ago, is now projected to be completed in 2027.
Following the tour, President Trump described the initiative as “a very luxurious situation.” However, when asked if the cost and overruns warranted Powell’s dismissal, Trump responded, “Look, I would love to see it completed. I don’t want to put that in this category. It’s a very complex thing that could have been made simple.”
He added that he feels “good” about his relationship with Powell and that their meeting on Thursday was “productive,” though he repeated his long-standing demand for lower interest rates.
“I just want to see one thing happen, very simple — interest rates have to come down,” he stated.
When a reporter questioned why Trump would wait until Powell’s term ends in 2026 instead of removing him now, the president replied, “To do that is a big move, I just don’t think it’s necessary. And I believe he’s going to do the right thing.”
President Trump has repeatedly criticized Powell over the Fed’s interest rate policy. Despite three rate cuts last year, the central bank has kept the benchmark short-term interest rate at 4.3% in 2025. Powell has maintained that the Fed is monitoring how the economy responds to Trump’s sweeping tariffs, which he says may drive up inflation.
Powell’s cautious stance has frustrated Trump, who has pressed the central bank to lower borrowing costs to stimulate the economy and reduce federal debt-servicing expenses.
The Federal Reserve’s renovation project involves both its main building and an adjacent structure. Rising construction costs, much of which stem from inflation spikes in 2021 and 2022 and underground work, have driven the budget from an original estimate of $1.9 billion to approximately $2.5 billion.
Last week, Trump told reporters that such a dramatic escalation in spending might justify Powell’s removal.
“I think it is,” Trump said, in response to whether the cost overrun was a fireable offense.
“When you spend $2.5 billion on, really, a renovation, I think it’s really disgraceful,” he added.
Dismissing Powell could raise significant concerns about the independence of the Federal Reserve, an institution that economists and investors have long expected to operate free from political pressure. Such a move would likely shake financial markets.
Over time, Trump has referred to Powell — whom he appointed — with several disparaging labels, including “numbskull,” “Trump Hater,” and “stubborn mule.”
According to CBS News, Trump recently asked a group of House Republicans during an Oval Office meeting whether he should fire Powell.
The next day, Trump told reporters that firing Powell is “highly unlikely,” though he acknowledged he had discussed “the concept of firing him,” adding, “almost all of them said I should.”
Longstanding Renovation Plans and Cost Drivers
Plans to overhaul the Fed’s facilities were approved by the Board of Governors in 2017 and subsequently reviewed by local oversight bodies. One of these, the Commission for Fine Arts — which included several Trump appointees — advocated for incorporating more marble into the second building at 1951 Constitution Avenue, particularly in a glass-heavy extension that some Trump-aligned commissioners criticized as resembling a “glass box.”
The National Capital Planning Commission also encouraged the use of marble in rooftop additions, further driving up costs.
In addition to design revisions, Fed staff have cited tariffs and inflation as major cost drivers. Trump’s 2018 tariffs imposed a 25% duty on steel and 10% on aluminum. Since the renovation plans were approved, steel prices have surged roughly 60%, and overall construction material costs have increased by about 50%, according to government data.
Fed officials have also stressed the complexity of working on historic properties. Both buildings require extensive preservation efforts, making them far more costly than constructing a new facility from scratch.
