Fed Watchdog Slams Central Bank for Mismanaging $2.4 Billion Renovation Project

The Federal Reserve's internal watchdog released a report criticizing the central bank for mismanaging its $2.4 billion renovation project, which has seen costs nearly double since the original estimate in February 2020.

The inspector general found that the Fed's Board of Governors and staff made key decisions that inflated the cost of the project, including failing to secure a comprehensive cost estimate or maximum overall cost at the beginning of the project. This allowed construction prices to spike after work began in 2022.

According to the report, the design change from an open workspace to mostly closed office space in 2023 caused significant delays and prevented the Fed from setting a maximum cost ceiling. The report also noted that while various factors contributed to the cost overruns, including inflation and unexpected expenses, they do not account for the impact of key project management decisions.

Trump administration prosecutors had investigated the renovation for potential criminal violations, but the inspector general found no evidence of wrongdoing. Trump himself called on Fed Chairman Jerome Powell to resign from the board, stating that he 'can't manage a building' and shouldn't be allowed to set interest rates.