On August 12, U.S. President Donald Trump publicly threatened to allow legal action against Federal Reserve Chair Jerome Powell.
The clash centers on soaring renovation costs for the Fed’s historic headquarters in Washington, D.C., and the central bank’s refusal to cut interest rates.
The renovation began with a $1.9 billion budget in 2021. Official Federal Reserve reports now place the cost near $2.5 billion, while Trump claims it could approach $3.1 billion.
The project includes replacing asbestos, upgrading outdated systems, strengthening security with blast-resistant glass, and preserving the building’s historic features. Work is planned to finish in 2027, with staff returning the following year.
The Fed says the higher costs come from inflation, rising materials prices, and safety hazards found after construction began. Officials argue the upgrades will save money over time by consolidating operations and increasing efficiency.
Trump argues the spending shows poor management and uses it to fuel his wider push for steep interest rate cuts. He claims lowering rates could ease borrowing for households and save the U.S. government up to $1 trillion annually in interest payments.
The Fed maintains rates at 4.25–4.50 percent, citing the need to ensure inflation stays under control. Their dispute became more visible when Trump made a rare presidential visit to the Fed’s headquarters, confronting Powell over the numbers.
Powell defended the project based on safety requirements and long-term needs. The Fed insists that some of the figures Trump cites relate to separate or older works.
A key fact, confirmed by U.S. law, is that the president cannot fire the Fed Chair or force rate changes over policy or budget disagreements. The central bank is independent by design to shield monetary decisions from political pressure.