Watchdog finds no Fed misconduct in renovation; Trump calls for Powell’s resignation
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Trump → find → resignation
The Federal Reserve’s Inspector General on Sept 30 said it found no grounds for a criminal referral or evidence of administrative misconduct tied to cost overruns in a US central bank renovation project.
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it → say → project
However, its conclusion there was lax oversight drew a fresh call from President Donald Trump for former Federal Reserve chief Jerome Powell’s resignation.
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conclusion → be → resignation
The Fed watchdog’s report highlighted extensive problems with project oversight that contributed to a roughly US$1 billion (S$1.28 billion) cost overrun for the renovation of the central bank’s two historic buildings on the National Mall in Washington.
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that → highlight → Washington
Trump had latched onto the cost overrun on the project, which now has a price tag of about US$2.4 billion, in his effort to engineer Powell’s ouster and gain influence over the direction of monetary policy.
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which → latch → policy
Trump is also trying to sack Fed Governor Lisa Cook over alleged wrongdoing in an unrelated matter.
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Trump → try → matter
The IG’s report noted that “at no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the US attorney general”.
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violation → note → general
“Further, while our report outlines deficiencies in the management of the renovation project, resulting in our recommendation of corrective actions in accordance with the Inspector General Act, we did not identify administrative misconduct during our evaluation,” it added.
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it → outline → evaluation
Powell declined to comment on the report, the latest chapter in an ongoing feud with Trump that goes back to 2018, when the president first criticized the Fed chief for not cutting interest rates.
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president → decline → rates
Trump had nominated Powell for the top Fed job in late 2017.
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Trump → nominate → 2017
“At a minimum, ‘Too Late’ Powell should be forced to resign from the Board.
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Powell → force → Board
He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy (only on “TRUMP!”),” the president wrote on Truth Social.
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president → manage → Social
“If he doesn’t resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence, both of which are completely unacceptable.”
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both → resign → which
Trump said he had directed Attorney General Todd Blanche “to study the report, and make a determination as to what to do”.
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he → say → what
Besides Powell, who led the Fed through most of the project, Fed Vice-Chair Philip Jefferson heads the central bank’s Committee on Board Affairs and serves as the “administrative governor” most directly involved in project oversight.
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Jefferson → lead → oversight
Jefferson did not have any immediate comment on the report.
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Jefferson → have → report
Fed Chairman Kevin Warsh, who took over from Powell in May, said he would follow the report’s recommendations on project management and hire an independent auditor to “verify accuracy and compliance” of all awarded costs to date.
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he → take → date
Trump’s own budget for White House ballroom renovations, now underway, doubled from initial estimates to at least $400 million.
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budget → double → million
Reaction from US lawmakers split along party lines.
“Inflation does not change the Fed’s responsibility to manage its resources prudently and be accountable to Congress,” said Republican Senator Tim Scott, who chairs the Senate Banking Committee, calling the cost overruns “egregious” and promising “rigorous oversight” of the Fed.
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who → split → Fed
Senator Elizabeth Warren, the committee’s top Democrat, said the report’s findings showed “no basis to restart the president’s witch hunt” against Powell.
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findings → say → Powell
Congress oversees the Fed, though the central bank sets its own budget and is not subject to the political appropriations process.
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bank → oversee → process
Trump had for years chafed at Powell’s leadership of the Fed, publicly and incessantly berating him for not lowering interest rates.
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Trump → chafe → rates
The spiralling cost of the Fed renovation project arose early in the president’s second term as a fresh focal point for the White House’s attacks on Powell.
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cost → spiral → Powell
Key members of the Trump administration and their allies in Congress suggested wasteful spending on luxury upgrades had ballooned the project’s budget to hundreds of millions of dollars more than earlier estimated.
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spending → suggest → dollars
Powell countered that the extra costs reflected unexpected challenges, such as asbestos abatement and higher-than-estimated prices for materials and labour as the construction went deep underground.
He also asked the Fed’s IG to take a fresh look at the project and its costs.
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He → counter → project
The report on Wednesday said design elements like marble, water features and a garden terrace cited by critics in the White House “did not materially contribute” to the cost overruns.
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elements → say → overruns
The 120-page document did, however, outline extensive management shortfalls, including a failure by the Fed to follow through on what it intended to be a “guaranteed maximum price” contract that would make the contractor responsible for cost overruns.
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contractor → outline → overruns
The maximum price, in effect, was never actually established, with Fed project managers awarding subcontracts that continued to escalate the price and timeline of the project.
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that → establish → project
The central bank, for example, ultimately paid US$346 million for plumbing and air conditioning on the project, triple the initial estimate.
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bank → pay → project
As controversy over the renovations escalated, Trump, accompanied by Scott, visited the renovation site in July 2025 to press his criticisms.
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Trump → escalate → criticisms
The visit led to a memorable on-camera incident in which Powell appeared to fact-check the president’s stated cost-overrun number.
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Powell → lead → number
Tensions rose sharply in January 2026, when US Attorney for the District of Columbia Jeanine Pirro issued subpoenas to the Fed Board seeking information about the cost overruns and Powell’s testimony to Congress about them.
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Pirro → rise → them
Powell disclosed the Department of Justice’s threat to criminally indict him in an unusual Sunday night video statement, calling it an attempt to intimidate an institution that sets interest rates based on what is best for the country rather than according to the president’s preferences.
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what → disclose → preferences
The revelation of the DOJ probe prompted an outcry against political interference in the central bank, not only from Powell’s global peers and economists but also, closer to home, from lawmakers, including some of Trump’s fellow Republicans.
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revelation → prompt → Republicans
A federal judge quashed the DOJ’s subpoenas in March, agreeing with Powell that they were a pretext for pressuring the Fed chief into lowering rates, as Trump wished, or resigning.
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Trump → quash → rates
Pirro’s subsequent decision to close her investigation and refer the matter to the Fed IG convinced Republican Senator Thom Tillis to allow Trump’s nomination of Warsh as Powell’s successor to proceed.
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nomination → close → successor
Powell, however, has stayed on at the Fed as a governor.
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Powell → stay → governor
“I have said that I will not leave the Board until this investigation is well and truly over, with transparency and finality, and I stand by that,” Powell said at his final press conference as Fed chief in April.
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Powell → say → April
Pirro’s office said on Sept 30 that it had received the report and was reviewing it.
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it → say → it
The Aporia
