Fed Watchdog Finds Mismanagement, No Crimes in $2.4B Building Renovation

The Federal Reserve's internal watchdog has found that the central bank mismanaged its $2.4 billion building renovation project, but did not uncover any criminal violations.

A 120-page report by the inspector general found that the Fed's Board of Governors and staff made numerous missteps that inflated the cost of the project.

The board failed to secure a comprehensive cost estimate at the beginning of the project and did not establish a maximum overall cost, which could have helped mitigate the impact of inflation.

Prices spiked after construction began in 2022, with the costs eventually doubling from an original estimate of $921 million in February 2020 to $2.018 billion by December 2024.

The project became a high-profile flashpoint during the Trump administration's efforts to pressure the Fed into cutting its key interest rate.