The Big Money Show talks about the federal government booking the handling of monetary policy and the fate of Jerome Powells’ role as Fed Chairman.
Federal Reserve Chair Jerome Powell asked central bank inspectors to consider renovations to Washington’s historic headquarters.
Over the weekend, Powell reportedly asked Federal Reserve Inspector General Michael Horowitz to review the project. This is suffering from cost escalation compared to pre-pandemic cost estimates for renovations. The news was first reported by Axios, but Reuters cited a source familiar with the request in a subsequent report.
Powell’s request follows a letter he received last week from Office of Business and Budget (OMB) director Russell Vert, criticizing the project’s $2.5 billion price tag.
Vought repeatedly called on Powell to cut interest rates and threatened to fire him, President Donald Trump wrote that the renovation project was “very troubled.” Other Trump allies, including FHFA director Bill Prute, have suggested that federal law would justify Powell to end “for a cause” because it eliminates fire by the president for other reasons.
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Federal Reserve Chairman Jerome Powell requested central bank inspectors to review the renovation project. (Anna Money Maker/Getty Images/Getty Images)
Powell has said many times that he intends to provide the remainder of his term as chairman, and that central banks rely on economic data rather than political considerations when making monetary policy decisions.
I posted a FAQ on the Mariner S. Eccles Building and the 1951 Constitutional Reserve, which explained that the Federal Reserve was to preserve two historic buildings that had not been upgraded since its construction in the 1930s.
Renovations include asbestos removal and lead contamination. Replacement of outdated electricity, plumbing, HVAC, fire detection and suppression systems. Changes to comply with safety and building standards.
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A cost overrun has been caused by many years of renovations to the Fed’s facilities, including the Marriner S. Eccles Federal Rervers Building. (Getty Images/Shen/Bloomberg via Getty Images
The Fed writes that various factors have led to “changes in the original building design as a result of consultations with review agencies, differences between the original estimates and actual costs of materials, equipment, labor, and increased costs, including unexpected conditions (e.g., anticipated asbestos of toxic contamination on the soil, and highly regarded water tables).
Additionally, the Fed documents addressed some of the several claims Vought asked in his letter. There is no new VIP dining rooms or VIP elevators, but the original elevator is more accessible and rehabilitated for people with disabilities.
The early design included new water features as per the Constitution, but they have been eliminated, with only the original fountains in the Eccles building being restored.
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Powell faces pressure from the Trump administration to cut interest rates, which have been exacerbated by criticism of the renovation project. (Craig Hudson/Reuters/Reuters)
The document also noted that the “garden terrace” in the Fed’s 2021 submission to the National Capital Planning Commission was the roof of an underground car park under the front lawn of the facility, as per the constitution.
Other “vegetative roofs” or green roofs are used to manage stormwater runoff and improve the efficiency of buildings, including other federal buildings.
The Fed noted that as the project progressed, it reduced or eliminated several features of the building, including rooftop spaces and new water features. It also cancelled another planned renovation of the New York Avenue building in 2024 due to high-profile construction costs.
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Additionally, the Fed has noted that since its first approval in 2017, its Governor’s Committee has been overseeing the project and is being overseen by the Board of Inspector’s Office (OIG), which audited the project in 2021.
Reuters contributed to this report.
