Fed Watchdog Clears Powell of Criminal Wrongdoing in Renovation Project

The Federal Reserve's internal watchdog released a report on Wednesday that found no evidence of criminal wrongdoing in the central bank's $2.4 billion building renovation project.

However, the inspector general did conclude that the Fed's Board of Governors and staff mismanaged the project, inflating its costs with various missteps, including failing to secure a comprehensive cost estimate at the beginning of the project.

The report stated that the board deviated from its cost-management provisions repeatedly, leading to prices spiking after construction began in 2022. The original estimate for the renovation was $921 million in February 2020, but it more than doubled to $2.018 billion by December 2024.

The project became a flashpoint during the Trump administration's efforts to pressure the Fed into cutting its key interest rate, with President Donald Trump visiting the construction site in July 2025 and correcting Chairman Jerome Powell's estimate of the project's expected costs.