$2.4 Billion Federal Reserve Renovation Project Found Mismanaged, Not Criminal

The Federal Reserve's internal watchdog has released a report on the central bank's $2.4 billion building renovation project, which found that while there was no criminal wrongdoing, the project was broadly mismanaged.

The inspector general's report stated that the Fed's Board of Governors and staff made several key mistakes that inflated the cost of the project, including failing to secure a comprehensive cost estimate at the beginning of the project and not nailing down a maximum overall cost.

Prices for construction materials spiked after work began in 2022, with the original estimated cost of $921 million doubling to $2.018 billion by December 2024, before ultimately reaching $2.4 billion.

The report also found that a design change made by the Fed in 2023 from an open workspace to mostly closed office space caused significant delays and added costs to the project.

Former Fed Chairman Jerome Powell had requested the investigation into the renovation in July 2025, after criticism mounted from Congress and Trump administration prosecutors, who were investigating whether Powell committed perjury during Senate testimony about the project.