Federal Reserve Chair Jerome Powell issued a rare direct public response after the U.S. Department of Justice opened a new probe into the central bank’s Washington renovation project. The investigation centers on work at the historic Marriner S. Eccles Federal Reserve Building and another Fed office on Constitution Avenue, with the project budget rising from $1.9 billion to $2.5 billion.
In a video posted online, Powell said grand jury subpoenas served on him were not really about the renovation itself or about congressional oversight. He argued that the Fed had tried to keep Congress informed through testimony and other public disclosures, and said the threat of criminal charges stemmed from the central bank setting rates based on its own judgment rather than the president’s preference for lower interest rates.
Probe follows congressional criticism
The controversy picked up after Powell’s testimony on the matter in June. Republican lawmakers criticized his remarks, and Rep. Anna Paulina Luna alleged that he downplayed the scope of the work and the cost overruns. She also said he denied certain features that may have appeared in earlier planning documents, including claims involving luxury elements or additions.
President Donald Trump also met Powell on camera at the construction site. The report described that exchange as tense and awkward, with Trump pressing the Fed chair over the project. Trump has repeatedly called him “Jerome Too Late Powell,” a jab tied to complaints that the federal funds rate has not been cut quickly enough.
A clear break from Fed custom
Powell’s decision to release a public video marked a sharp break from the usual approach taken by Federal Reserve chairs. According to the report, past chairs generally limited public communication to policy reports, post-meeting press conferences, and congressional testimony. It cited former Chair Paul Volcker as an example, noting that he did not address the nation in self-defense even after rates reached 20% and farmers drove tractors through Washington in protest.
Why the renovation cost drew scrutiny
The article says the project covers roughly 1 million square feet in downtown Washington. That price tag has drawn attention, but the report argues it is not automatically out of line for a project of that size. The Fed has pointed to asbestos removal, major security requirements, historic preservation expenses, and inflation since the project began.
It also offered comparisons. The redevelopment of St. Elizabeths Campus for the Department of Homeland Security in Washington is projected to cost more than $4.4 billion. The renovation of the United Nations headquarters in New York was completed in 2014 at a cost of $2.15 billion, which the article says would be higher in today’s dollars.
Independence concerns move into focus
The report links the clash between the Federal Reserve and the executive branch to broader concerns about central bank independence. It notes that the dispute has unfolded alongside record highs in gold, silver, several other precious metals, the S&P 500, and the Dow Jones Industrial Average.
At the center of the DOJ probe is whether Powell misled Congress about the renovation’s cost and scope. Powell, for his part, rejected that framing and said the real issue was political pressure tied to the Fed’s interest-rate decisions.