A top Trump administration official accused Federal Reserve Chair Jerome Powell of leading an “ostentatious” office renovation project that may be “violating the law,” a new broadside against the central bank chief as President Trump tangles with him over interest rates.\u00a0<\/p>\n
“The President is extremely troubled by your management of the Federal Reserve System,” Office of Management and Budget Chair Russell Vought wrote in a July 10 letter<\/a>.<\/p>\n The letter came after months of criticism from Mr. Trump over the Fed’s decision not to slash interest rates<\/a>. Economists say lowering rates may accelerate economic growth, but it also runs the risk of causing inflation to spike. That has led the Fed’s interest rate-setting committee \u2014 which Powell chairs \u2014 to keep rates steady so far this year after cutting rates slightly last year.<\/p>\n Mr. Trump has called on Powell to resign from his post, and last month, the president called Powell<\/a> a “numbskull” over his interest rate decisions and said “maybe” he’ll try to fire Powell \u2014 though federal law states<\/a> the Fed chair can only be fired “for cause,” which typically refers to firings due to specific misconduct or performance issues. In the past, Mr. Trump had said he doesn’t plan on trying to fire Powell, whose term as Fed chair ends next year.\u00a0<\/p>\n Vought’s letter took aim at Powell and the central bank over its yearslong office renovation project in Washington, D.C. The letter said plans<\/a> for the project “called for rooftop terrace gardens, VIP private dining rooms and elevators, water features, premium marble, and much more.” Vought also asked whether the Fed has made changes to its plans<\/a> without seeking approval from a government commission that oversees D.C.-area federal building projects.\u00a0<\/p>\n In testimony to the Senate last month, Powell called some descriptions of the renovation project “misleading and inaccurate.” He told lawmakers there isn’t any new marble aside from what’s necessary to replace broken old marble, and said there are no “special elevators,” new water features or rooftop gardens.\u00a0<\/p>\n “All of the sort of inflammatory things that the media carried are either not in the current plan or just inaccurate,” Powell said.<\/p>\n Vought’s letter argued that comment to the Senate “appears to reveal that the project is out of compliance with the approved plan,” suggesting the Fed may have run afoul of a law requiring D.C.-area projects be approved by the National Capital Planning Commission. In a post on X, the Office of Management and Budget alleged Powell “slipped up and revealed he might…be violating the law.” The Fed’s renovation plans were reviewed by the commission several years ago.<\/p>\n Powell defended the Fed’s handling of the project<\/a> in a letter Thursday responding to Vought, saying the Fed has “taken great care to ensure the project is carefully overseen.” He also said the project has been “subject to budget approval” by board members annually.<\/p>\n The Fed chair said the Fed generally isn’t subject to the National Capital Planning Commission’s approval, but it did work with the agency “voluntarily” in 2020 and 2021. Since then, Powell said, the central bank has only “made a small number of design changes to scale back or eliminate certain elements,” so no further review by the commission is needed.<\/p>\n The Fed typically operates with a much higher degree of independence than most other government institutions. Federal law gives the Fed the power<\/a> to make decisions about acquiring and remodeling buildings in Washington to serve as its office spaces.<\/p>\n The Fed has previously acknowledged<\/a>\u00a0that the price tag for its office renovations had jumped due to “significant increases in raw materials costs,” along with higher labor costs.\u00a0<\/p>\n On its website, the Fed says<\/a> the two headquarters buildings that are getting overhauled “have not been comprehensively renovated since their construction in the 1930s.” The central bank said there are no private elevators or new VIP dining rooms \u2014 instead, the project will refurbish old elevators and conference rooms, including ones that are sometimes “used for mealtime meetings.” It also said plans for new water features were scrapped, though existing fountains will be repaired, and the garden terrace is actually a “ground-level front lawn.”<\/p>\n On July 2, Bill Pulte, the Trump-nominated head of the Federal Housing Finance Agency, accused<\/a> Powell of “deceptive” testimony to the Senate about the office project.<\/p>\n When asked about the allegation in a recent Cabinet meeting, Mr. Trump said: “Then he [Powell] should resign immediately. We should get somebody in it that’s going to lower interest rates.”<\/p>\n \n More from CBS News\n <\/p>\n