Is the Federal Reserve building a modern-day Versailles while the economy teeters? According to The New York Post, a developing scandal has exposed a massively mismanaged project that could have big consequences.
Federal Reserve Chair Jerome Powell is in hot water over a $2.5 billion renovation of the Fed’s Washington, D.C., headquarters, facing accusations of misleading Congress, sharp criticism from Trump allies, and mounting calls for his resignation despite his stated intent to serve until his term ends in May 2026.
The controversy kicked off in April when The Post revealed the staggering cost of the Fed’s headquarters overhaul, a project that ballooned 30% from an initial $1.9 billion estimate.
Critics, including Sen. Tim Scott of South Carolina, didn’t hold back, likening the lavish spending to the opulent “Palace of Versailles.” It’s hard to ignore the irony of such extravagance when hardworking Americans are pinching pennies.
By June 25, Powell faced tough questions during a Senate Banking Committee hearing, where he flat-out denied claims of extravagant features like VIP dining rooms or rooftop gardens.
“There’s no new marble,” Powell insisted. Yet, planning documents approved by the National Capital Planning Commission in 2021 tell a different story, raising eyebrows about his candor.
Powell’s defense that many of the approved plans were scrapped hasn’t quelled the skepticism. If the plans were discarded, why did the budget confirmed by The Post via a Freedom of Information Act request on Tuesday still hit $2.5 billion? That’s a question many taxpayers are asking.
The heat intensified when Office of Management and Budget Chief Russ Vought slammed the project as a “glorified vanity project” in a scathing letter.
“Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul,” Vought wrote. Such words cut deep, especially when fiscal restraint is a rallying cry for conservatives.
On Thursday, President Trump, who has openly criticized Powell for being “Too Slow” on interest rate cuts, appointed three new members to the National Capital Planning Commission.
This shake-up, affecting a body that oversees federal projects, is seen by many as a calculated move to tighten the screws on Powell. A senior administration official even called it part of a “4D chess” strategy to push for resignation.
Speaking of resignation, whispers are growing louder, with a senior Trump official claiming on Friday that Powell is mulling stepping down. Another unnamed government source quipped, “Why would you stay at a party when no one wants you there?” It’s a biting remark, but it captures the sentiment of a Fed Chair reportedly feeling “fatigued” and under siege.
Adding fuel to the fire, Bill Pulte, a key figure in federal housing finance, has been vocal on social media, urging Powell to quit over what he calls “deceptive” testimony.
“I think this will be the right decision for America,” Pulte declared. While his enthusiasm for a booming economy is shared by many, the lack of concrete evidence behind his claims leaves room for doubt.
Despite the mounting pressure, Powell has publicly stated as recently as April 4 that he intends to finish his term through May 2026. But with sources citing “high-level, credible” whispers of wavering resolve, the speculation persists. It’s a tough spot for a man caught between principle and political crosswinds.
Vought’s letter, obtained by The Post, didn’t just criticize—it demanded answers by next week, alleging potential violations of federal planning laws.
“The President is extremely troubled by your management,” Vought wrote. For an administration focused on accountability, this is a clear signal that Powell’s leadership is under a microscope.
Meanwhile, Wall Street watches closely as the Fed’s next meeting at the end of July approaches, with expectations that interest rates will hold steady between 4.25% and 4.5%.
Powell’s handling of monetary policy, already criticized by Trump, now competes with this renovation debacle for headlines. It’s a double whammy that could define his legacy.
If Powell does step down, names like Kevin Hassett, Scott Bessent, and Kevin Warsh are already floating as possible successors. Yet, a White House insider pushed back, stating, “There are no plans to change the Fed chair.” That assurance might calm some nerves, but it doesn’t silence the storm surrounding Powell.