WASHINGTON (TNND) — President Donald Trump made the short trip from the White House to the Federal Reserve headquarters on Thursday. They’re less than a mile apart, but there’s a reason a sitting president hasn’t visited in nearly 20 years.
America’s central bank is meant to operate independently from politics in order to stay true to its congressionally mandated mission to maintain price stability and maximum employment. But Trump hasn’t shied from injecting his opinion of the Fed’s performance into the public discourse and, especially in his second term, launching personal attacks against Fed Chair Jerome Powell, whom he first nominated for the job in 2017.
“I’d love him to lower interest rates,” said Trump as he gave Powell a pat on the back.
Following months of complaints that the Fed hasn’t cut interest rates, Trump started scrutinizing the years-long renovation of the Fed’s Marriner S. Eccles Building and the 1951 Constitution Avenue Building in Washington. The project has run about $600 million over the original budget and is now expected to cost $2.5 billion.
A remarkable moment occurred at the beginning of Trump’s visit when Powell fact-checked, in real time, the president’s claims about the cost of the renovation.
“It looks like it’s about $3.1 billion. It went up a little bit, or a lot. So the 2.7 is now 3.1,” Trump said to a gaggle of reporters, with Powell standing next to him.
Powell immediately shook his head.
“I’m not aware of that, mister president,” Powell said.
“It just came out,” said Trump, pulling a piece of paper out of his suit jacket and handing it to Powell.
After a few seconds of reviewing the document, Powell pointed out that the figure Trump cited included the Fed’s Martin Building, which was built five years ago.
“You just added in a third building, is what that is. That’s a third building,” Powell said. “It’s not new.”
This current renovation does not come at the expense of taxpayers. The Fed is self-funded through interest it earns on government securities it trades on the open market, fees from services and loans it provides to depository institutions like banks and interest on foreign currency investments.
The two buildings were constructed nearly a century ago and have never undergone comprehensive renovations. Work includes removing asbestos and lead, replacing plumbing, HVAC, the fire detection system and bringing the building up to modern accessibility, security and safety standards.
According to a new information page on the Fed’s website created following scrutiny from the Trump administration, reasons for the unforeseen costs included more asbestos than expected, a higher-than-anticipated water table, soil contamination, changes to building designs, differences in estimated and actual costs of materials and labor, and inflation. The page debunked claims that the renovation included plans for VIP elevators, a VIP dining room and water features.
Due to the increased costs of these two buildings, last year the Fed’s Board of Governors cancelled plans for the renovation of their building on New York Avenue in Washington.
The renovation is overseen by the entire Board of Governors, not just Powell, and is subject to audits by a designated Office of Inspector General, which is currently conducting an evaluation that will look into the key factors behind the cost increases, “including assessing whether discretionary design features contributed materially to those increases.”
A 2021 OIG audit concluded the board should improve contractor oversight and develop a policy on project management. It also found the board had appropriate policies and procedures in place for securing renovation-related service contracts.