Federal Reserve Getting Palace-Like Rebuild?

A US$2.5 billion renovation meant to bring the Federal Reserve’s headquarters up to modern safety standards has escalated into a political drama, with accusations that Chair Jerome Powell misled Congress about the project’s true scope and cost. Planning records show the makeover of the Marriner S. Eccles Building, and two adjoining structures is now expected to cost 30% more than the already astronomical US$1.9 billion figure presented when final design approvals were granted in 2021.

Could this be Trump's opportunity to pressure Powell to resign, or is his term already too close to ending? Regardless, it is a blow to the Fed's reputation. 

Documents filed with the National Capital Planning Commission detail more than just basic upgrades and asbestos removal. They describe restoring private dining suites for the Board of Governors, a dedicated governors’ elevator opening directly into the dining area, and landscaped roof terraces designed to attract “urban wildlife and pollinators,” along with extensive new marble finishes.

During sworn testimony before the Senate Banking Committee on 26 June 2025, Powell rejected reports of the luxuries, telling lawmakers there would be “no private dining room, no special elevator, no roof gardens.” Senators later produced the planning filings, which appeared to show otherwise. The discrepancy has sparked calls from Federal Housing Finance Agency head William Pulte for a formal investigation and possibly Powell’s removal.

Political pressure has intensified as outside critics frame the refurbishment as a “Palace of Versailles” on Constitution Avenue. Comparisons with private-sector projects have added fuel: JPMorgan Chase’s brand-new 60-storey headquarters in Manhattan is expected to cost only about US$500 million more than the Fed’s planned retrofit. Fiscal-hawk senators note that the central bank’s operating budget has expanded rapidly in recent years, arguing that weak oversight has allowed construction expenses to get out of control.

Unlike most agencies, the Fed hires its own inspector general, and the Government Accountability Office is barred by statute from auditing Board operations in depth. That structure limits external scrutiny just as project costs are being rebased. House Judiciary Chair Jim Jordan has indicated staff are collecting documents for a possible probe, while Senate Banking leaders are weighing whether to refer Powell’s testimony to the Justice Department if written corrections are not filed within 30 days.

For now, demolition work inside the Eccles Building is advancing under existing contracts, but a congressional funding freeze could halt progress as early as September. The Board is expected to publish a revised life-cycle cost estimate in the fourth quarter; if overruns exceed 50 per cent of the 2021 estimate, regulators could reopen the entire design approval process. With the Fed already posting large operating losses from its bond-portfolio runoff, another billion-dollar surprise would come at an awkward moment, which would be just months before Powell has his successor deliberated in 2026.