The Federal Reserve’s watchdog found no criminal violations in the costly renovation of its headquarters but highlighted management failures, as President Trump continued to pressure former Chair Jerome Powell, who faces calls for resignation over the project’s $2.4 billion price tag.
The Federal Reserve’s inspector general revealed that while the central bank’s renovation of its Washington, D.C., headquarters faced severe cost overruns, there was no evidence of criminal misconduct, according to a report released on September 30, 2026. The project, which saw costs more than double from an initial budget of $921 million to $2.018 billion, became a flashpoint in tensions between former Fed Chair Jerome Powell and President Donald Trump, who repeatedly criticized the spending.
The renovation of the Fed’s Marriner S. Eccles and 1951 Constitution Avenue NW buildings saw its approved budget grow from $1.317 billion in February 2020 to $2.381 billion by December 2024, according to the inspector general’s report. The audit cited deficiencies in the management of the renovation project, including the failure to establish a guaranteed maximum price contract and inadequate oversight of construction bids.
The report also noted that the Fed’s construction manager proposed a $2.135 billion budget in January, while the project’s current price tag stands at about $2.4 billion. The inspector general emphasized that while the Fed’s project management resulted in our recommended corrective actions, there was no administrative misconduct during the evaluation. US News highlighted that the IG identified extensive problems with project oversight but found no criminal referral grounds.
Inspector general finds no misconduct in Federal Reserve renovations
President Trump seized on the report to renew his calls for Powell’s resignation, accusing him of gross incompetence and claiming the Fed chair should be forced to resign, IMMEDIATELY! in a Truth Social post. The former president argued the renovation’s Record Setting rate and hundreds of millions of dollars over budget justified his demands, adding, He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy.
Trump also directed Attorney General Todd Blanche to study the report and make a determination as to what to do.
The Justice Department had previously opened an investigation into Powell in January, tied to congressional testimony about the renovation, but dropped it in April without charges. Yahoo reported that the inspector general’s findings 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 U.S. Attorney General.
The report also noted that the Fed’s management issues were “not criminal” but warranted corrective actions.
Senator Thom Tillis, R-North Carolina, had previously cited the renovation as a reason to withhold support for Kevin Warsh’s confirmation as Powell’s successor. Foxbusiness noted that Tillis eventually supported Warsh, who took over as Fed chair in May.
Chairman Kevin Warsh has pledged to follow the IG’s recommendations, including hiring an independent auditor to verify costs.
Watchdog Finds Deficiencies But No Fed Misconduct In Powell
The episode underscores the political pressures on the Fed, even as its leaders stress independence. While the IG’s report cleared Powell of criminal charges, it did not quell the ideological clashes between the central bank and the Trump administration. As Powell’s term as a governor ends on Jan. 31, 2028, the renovation’s legacy will likely linger as a case study in the challenges of balancing fiscal responsibility with institutional priorities.
The Office of Inspector General for the Federal Reserve’s Board of Governors began investigating the cost overruns at Powell’s request in July 2025. Powell, then the Fed chair, disclosed in January that the Department of Justice opened a criminal probe into his June 2025 testimony before Congress about the renovation project. The U.S. Attorney’s Office closed the investigation in April as the inspector general continued its probe into the matter. 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 U.S. Attorney General in accordance with the Inspector General Act,
the IG report states. “Further, while our report outlines deficiencies in the management of the renovation project, resulting in our recommended corrective actions in accordance with the Inspector General Act, we did not identify administrative misconduct during our evaluation,” the report added.
The Fed’s inspector general’s report, which was 120 pages long, highlighted extensive problems with project oversight that contributed to a roughly $1 billion cost overrun for the renovation of the central bank’s two historic buildings on the National Mall in Washington. Trump had latched onto the cost overrun on the project, which now has a price tag of about $2.4 billion, in his effort to engineer Powell’s ouster and gain influence over the direction of monetary policy.
The Federal Reserve’s headquarters, where construction continues, is reflected in a mirror in Washington, D.C., U.S., August 6, 2026. REUTERS/Kevin Lamarque By Howard Schneider, Michael S. Derby and Ann Saphir WASHINGTON, Sept 30 (Reuters) – The Federal Reserve’s Inspector General on Wednesday 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. However, its conclusion there was lax oversight drew a fresh call from President Donald Trump for former Federal Reserve chief Jerome Powell’s resignation. The Fed watchdog’s report highlighted extensive problems with project oversight that contributed to a roughly $1 billion cost overrun for the renovation of the central bank’s two historic buildings on the National Mall in Washington. Trump had latched onto the cost overrun on the project, which now has a price tag of about $2.4 billion, in his effort to engineer Powell’s ouster and gain influence over the direction of monetary policy.
POWELL SAYS HE’LL STAY ON FED BOARD AFTER CHAIRMANSHIP ENDS BUT WON’T BE A ‘SHADOW FED CHAIR’ The inspector general found no