Construction of the Marriner S. Eccles Federal Rervers Building in Washington, DC, Washington, DC, USA on Wednesday, June 25th, 2025.
Al Drago | Bloomberg | Getty Images
Sources familiar with the issue said the Federal Reserve introduced its inspectors to consider expanding the building that caused the fire from the White House.
Fed Chair Jerome Powell called for a review following the fierce criticism of the project, initially only at $2.5 billion, but was hit by a cost overrun that led to accusations from President Donald Trump and other administration officials of “basic mismanagement.”
“The idea that the Fed could print the money and then spend $2.5 billion on a building without actual Congressional oversight did not happen to those who framed the Federal Reserve Act,” said Kevin Hassett, director of the National Economic Council on CNBC’s “Scoobox.” “There’s the real problem of surveillance and overexpense.”
OIG is responsible for providing services to the Fed and the Consumer Financial Protection Agency and seeking fraud, waste and abuse. Powell’s request was first reported by Axios.
In a letter posted to social media last week, management and budget director Russell Vert also denounced the project. The project includes two of the Fed’s three Washington, DC buildings, including its main headquarters known as Eccles Building.
Vought compared the building to the Palace of Versailles and accused Powell of committing a “funding mismanagement” at the Fed.
The central bank has detailed frequently asked questions pages on its site for that part, highlighting important details and explaining why some specifications have been changed or “reduced or eliminated.”
“The project will also correct safety issues by removing hazardous materials such as asbestos and lead and bringing the building to modern code,” explains the page. “Regular work has been done to make it possible to occupy the buildings, but we haven’t seen any comprehensive renovations since either of them was built.”
The Fed is not a taxpayer-funded agency and is not under OMB supervision. Although we have worked with Washington’s National Capital Planning Committee on the project, the FAQ page states that “none of these changes are considered to guarantee further review.”
In separate comments, former Fed Gov. Kevin Wahsh spoke about the Fox business on Sunday, calling the renovation costs “outrageous” and said it was more evidence that the central bank has “lost a way.” Warsh is considered a strong candidate to succeed Powell when the latter term as a chair expires in May 2026.
