Watchdog findings

A roughly 120-page report released by the Federal Reserve Inspector General on September 30, 2026, concluded that multi-billion-dollar renovations to the central bank's headquarters involved no criminal violations. The inquiry reviewed construction on the Eccles Building, constructed between 1935 and 1937, and the 1951 Constitution Avenue Building, constructed in 1932. The watchdog stated that it found no reasonable grounds for a criminal referral to federal prosecutors and identified no administrative misconduct. The report noted management deficiencies, citing a lack of competitive bids for certain jobs, design changes, site conditions, inflation, and a failure to communicate a clear cost ceiling. A December 17, 2024 budget listed total project costs at $2.46 billion, up from $1.88 billion in a previous budget.

“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.”

Trump demands immediate departure

President Donald Trump responded on Wednesday by demanding that former central bank chair Jerome Powell leave his remaining seat on the Federal Reserve Board of Governors. Writing on Truth Social, Trump argued that the construction project exceeded budget limits at a record rate and blamed Powell directly for the spending. Trump stated that the federal government should sue Powell at the highest level for corruption or incompetence if he refuses to step down. The president also announced that he instructed Attorney General Todd Blanche to review the report and determine next steps. Powell declined to comment following the release of the findings.

“At a minimum, 'Too Late' Powell should be forced to resign from the Board. He can't manage a Building, and he certainly shouldn't be allowed to manage his High Interest Rate Policy (only on 'TRUMP!').”

Monetary policy disputes and board tenure

The dispute over construction spending follows an extended conflict over monetary policy dating back to 2018. Trump nominated Powell to lead the central bank in late 2017 but began publicly criticizing him months into his term for maintaining higher interest rates. Powell completed his term as Fed chair in May 2026 but chose to remain on the Board of Governors, where his appointed term runs until 2028. Powell broke with decades of convention by staying on the board, a decision intended to protect central bank independence from executive pressure. Trump has also sought to remove Fed Governor Lisa Cook in an unrelated dispute.

Timeline of inquiries and political fallout

Scrutiny of the building project intensified in April 2025, when Elon Musk, then head of the Department of Government Efficiency, called for an investigation into headquarters spending. In June 2025, Senate Banking Committee Chair Tim Scott questioned Powell during a monetary policy hearing regarding luxury upgrade allegations, which Powell denied by citing structural safety needs. In July 2025, Office of Management and Budget Director Russell Vought wrote to Powell conveying that Trump was troubled by the spending, while Democratic Senator Elizabeth Warren described the criticism as a pretext to oust the central bank leader. The Justice Department opened an investigation into Powell's congressional statements in January 2026, closing the probe in April 2026 without bringing charges.