The UK (Financial Times) reported on Friday (July 11) that the White House accused Powell of "seriously" mismanaging the "showy" renovation of the Federal Reserve headquarters, thus opening a new front in the attack on the Fed chair.
(Screenshot source: UK (Financial Times))
Russell Vought, the Director of the Office of Management and Budget, stated in a letter posted on social media X that Federal Reserve Chair Powell has "seriously mismanaged" and accused Powell of overseeing a renovation project that exceeded the budget by $700 million.
In the letter, this Trump ally stated: "The President is deeply concerned about your management of the Federal Reserve system. Not only have you failed to correct the Federal Reserve's financial direction, but you have also stubbornly gone ahead with an extravagant renovation of the headquarters in Washington, D.C."
Vought pointed out that the cost of the Fed's renovation project may be only $500 million less than the cost of renovating the Palace of Versailles. This accusation marks a new strategy in the Trump administration's battle with the Fed.
Vought wrote in the letter: "The Federal Reserve's renovation project currently costs up to $2.5 billion, about $700 million more than the initial cost. These projects include a terrace rooftop garden, water feature, VIP elevator, and high-end marble. The cost per square foot is $1,923, which is double the cost of renovating a historic ordinary federal government building. In today's dollars, the renovation cost of the Palace of Versailles is $3 billion."
U.S. President Donald Trump frequently launches attacks on the Federal Reserve's interest rate policy, calling Powell a "stubborn mule" and "fool" because the Fed has maintained interest rates at 4.25-4.5% since the beginning of this year.
The Federal Reserve stated that it would not further lower interest rates until it has more evidence of how Trump's trade war will affect U.S. inflation.
Trump has repeatedly accused the Federal Reserve of not lowering interest rates, leading to an increase in the U.S. government's refinancing costs by hundreds of billions of dollars.
Republican lawmakers have criticized the Fed's renovation costs, with Senate Banking Committee Chair Tim Scott stating that the Fed's renovation work seems out of touch as ordinary Americans struggle.
Billionaire Tesla boss Elon Musk also highlighted the cost of the reconstruction project that began in 2021 when he served as the head of what Trump called the "Department of Government Efficiency."
The Federal Reserve stated in May this year that it would cut more than 10% of its workforce to become a "responsible steward of public resources."
But Vought's comments mark the first direct attack from Trump's close allies.
Powell stated that media reports about excessive behavior in the reconstruction were "inaccurate" and claimed during a congressional hearing that many planned features—including a dedicated elevator, a beehive, and a rooftop terrace—had been canceled.
Bill Pulte, the Federal Housing Finance Agency chairman appointed by Trump, claimed that Powell's testimony in Congress was misleading and called for his resignation in a comment retweeted by President Trump. Trump echoed Pulte's call for Powell to resign before his second term ends in May 2026.