The Federal Reserve’s Inspector General released a report on Wednesday concluding there was no evidence of criminal activity or administrative misconduct linked to significant cost overruns in the central bank’s renovation project. Despite the finding, President Donald Trump immediately renewed his demands for former Fed Chair Jerome Powell to resign.
The watchdog’s investigation highlighted substantial deficiencies in project oversight that contributed to approximately $1 billion in cost overruns for the renovation of the Fed’s two historic buildings on the National Mall in Washington. The total price tag for the project has now reached roughly $2.4 billion.
“At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the US attorney general,” the report stated. It further noted that while management deficiencies were identified, “we did not identify administrative misconduct during our evaluation.”
Powell declined to comment on the report, which marks another chapter in a protracted feud with Trump dating back to 2018. The president had originally nominated Powell for the Fed chairmanship in late 2017.
Speaking on Truth Social, Trump attacked Powell’s management capabilities. “At a minimum, ‘Too Late’ Powell should be forced to resign from the Board. He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy,” Trump wrote. He added that if Powell did not resign voluntarily, he should be sued by the United States government for either corruption or incompetence.
Trump stated he had directed Attorney General Todd Blanche to review the report and determine subsequent actions. The report also identified Fed Vice Chair Philip Jefferson, who heads the Committee on Board Affairs, as the administrative governor most directly involved in project oversight. Jefferson did not immediately comment on the findings.
Fed Chairman Kevin Warsh, who succeeded Powell in May, announced he would implement the report’s recommendations and hire an independent auditor to verify compliance and accuracy of all awarded costs. Warsh emphasized the need to address the extensive management shortfalls outlined in the 120-page document, including the failure to enforce a guaranteed maximum price contract with contractors.
Reaction from Congress was divided along partisan lines. Republican Senator Tim Scott, who chairs the Senate Banking Committee, called the cost overruns “egregious” and promised rigorous oversight, noting that inflation does not excuse poor resource management. Meanwhile, Democratic Senator Elizabeth Warren, the committee’s top Democrat, argued the findings showed “no basis to restart the president’s witch hunt” against Powell.
The controversy has escalated significantly since early in Trump’s second term. In July 2025, Trump visited the renovation site accompanied by Senator Scott, leading to a public disagreement where Powell appeared to fact-check the president’s figures. Tensions peaked in January 2026 when Jeanine Pirro, the US Attorney for the District of Columbia, issued subpoenas to the Fed Board regarding the overruns and Powell’s congressional testimony.
Powell revealed that the Department of Justice had threatened to criminally indict him, describing it as an attempt to intimidate the institution. A federal judge later quashed the subpoenas in March, agreeing with Powell that they were pretextual efforts to pressure the Fed into lowering rates or forcing his resignation.
Powell remains on the Fed Board as a governor after his term as chair expired. “I have said that I will not leave the Board until this investigation is well and truly over, with transparency and finality, and I stand by that,” he said at his final press conference in April. Pirro’s office confirmed it received the latest report and is currently reviewing it.
Subpoenas from the Justice Department against the Fed sounds like political retaliation, plain and simple.
$2.4 billion for offices with no criminal charges? The management failures seem massive regardless.
Interesting timing. Powell staying put while Trump yells creates uncertainty for markets.