April 24 (Reuters) - The Federal Reserve's years-long renovation of two historic buildings along the National Mall to be used as part of its headquarters in Washington exploded into political controversy about a year ago, with a New York Post report on the project's "lavish" features and nearly $2.5 billion price tag.
The report came amid President Donald Trump's escalating attacks on the Fed and Fed Chair Jerome Powell for not slashing interest rates as Trump wanted. It prompted an immediate call
from Elon Musk, then head of the Trump administration's Department of Government Efficiency, for an investigation, and accusations of wasteful spending by Republican lawmakers like Senate Banking Committee chair Tim Scott.
Here's what happened next:
June 24, 2025: Scott and several other members of the Senate Banking Committee send Fed Chair Jerome Powell a letter asking him to justify the cost of the renovations, which they said included "rooftop garden terraces, ornate water features, new elevators that drop board members off directly in their VIP dining suite ... rooftop Italian beehives" among other amenities.
June 25, 2025: Powell testifies before the Senate Banking Committee that reports of such luxury amenities are inaccurate. Documents show the Fed's current budget for the two buildings is about $1.1 billion more than it had originally allocated in 2020, with most of the increase attributable to rising costs for material and labor amid the post-pandemic surge in inflation. Also contributing were design changes mandated by the national planning commission and unanticipated costs including handling of asbestos.
July 2, 2025: Federal Housing Finance Agency Director Bill Pulte, a staunch Trump ally, posts on X that Powell's testimony was deceptive and worthy of "for cause" removal from office, and calls for a Congressional investigation.
July 10, 2025: Office of Management and Budget director Russell Vought demands Powell explain the building renovations and suggests the Fed did not follow proper approval procedures.
July 14, 2025: Powell provides a detailed explanation of the renovations in a letter to Scott and the Senate Banking Committee's top Democrat Elizabeth Warren. The Fed also posts a series of FAQs on its website detailing the costs, and Powell asks the Fed's Inspector General to take a fresh look at the project.
July 17, 2025: Powell responds to Vought's letter with the same information provided to the senators.
July 24, 2025: Trump, accompanied by Pulte and Vought and senators Scott and Thom Tillis, visits the construction site and are given a tour by Powell. Trump takes the opportunity to again urge interest-rate cuts.
November 2025: U.S. Attorney for the District of Columbia Jeanine Pirro opens a criminal investigation into Powell that focuses on alleged misstatements in his July Senate testimony, according to court documents that were unsealed four months later.
January 11, 2026: Powell discloses the DOJ probe and subpoenas in an unusual Sunday evening video, calling it unprecedented intimidation, and a pretext for the president to gain influence over the Fed's monetary policy decisions.
January 12, 2026: The DOJ probe draws widespread condemnation as a threat to Fed independence. Senator Tillis says he'll block any Fed nominee as long as the investigation remains open. Other Republican lawmakers raise similar objections.
January 30, 2026: Trump nominates Kevin Warsh to be the next Fed chair upon the expiration of Powell's leadership term on May 15. Tillis reiterates his position.
March 13, 2026: A U.S. judge blocks the DOJ's subpoenas, agreeing with Powell that the probe was an improper attempt to intimidate the central bank into cutting interest rates. Pirro vows to appeal the ruling.
March 18, 2026: "I have no intention of leaving the Board until the investigation is well and truly over, with transparency and finality," Powell says.
April 14, 2026: Prosecutors from Pirro's office make a surprise visit to the Fed's renovation work site, and are turned away.
April 21, 2026: The Senate Banking Committee holds a confirmation hearing for Warsh. Tillis reiterates his position.
April 22, 2026: Pirro says her investigation is going forward. Trump gave his public support, saying "we have to find out" how the building cost so much.
April 24, 2026: Pirro says she'll close the investigation and has referred it to the Fed's Inspector General, which had begun its own investigation at Powell's request nine months earlier. "I will not hesitate to restart a criminal investigation should the facts warrant doing so," she adds.
(Reporting by Ann Saphir, Editing by Nick Zieminski)
