Fed Review Clears Powell, Blames Board Oversight for Renovation Costs

The Federal Reserve renovation project's ballooning cost has become a contentious issue in Washington, but an internal review by the inspector general found no evidence that Jerome Powell, the Fed's former chair, broke any laws or engaged in misconduct.

The report, which totals 120 pages, did not directly implicate Powell in wrongdoing. Instead, it faulted the Board of Governors for inadequate oversight and a lack of cost controls during the project's planning stages.

The renovation's budget has nearly doubled since initial estimates were made in 2020, with approximately $2.4 billion now allocated to complete the work.

According to the report, the Board of Governors did not set a cost cap for the project and failed to require bidders to provide comprehensive cost estimates.

The new chair of the Federal Reserve, Kevin Warsh, has agreed to implement the inspector general's seven recommendations, which include conducting an audit of the project and determining whether existing contracts allow some costs to be recovered.