Criticism from the White House: Powell under fire for expensive Fed renovation!

Criticism from the White House: Powell under fire for expensive Fed renovation!

In a surprising twist, the White House has investigated the activities of U.S. Chairman Jerome Powell. Federal Reserve, sharply criticized. Russell Vought, director of the Office of Management and Budget, has accused him of gross mismanagement. In an open letter posted on the social media platform

The renovation of the Federal Reserve headquarters is expected to cost up to $2.5 billion, which is $700 million higher than original cost estimates. The cost per square foot adds up to an impressive $1,923. In addition to the financial aspects, Vought also criticized the luxurious features of the project, which is said to include, among other things, “rooftop gardens, water features and VIP elevators.” Fine marble is also planned, although Powell acknowledged that it was indeed over budget but described some of the perceived luxury appointments as misleading and inaccurate.

Criticism of interest rate policy and deficit

In addition to the renovation allegations, the Federal Reserve has been under pressure since 2023 over an operating deficit that now exceeds $235 billion. This concern has increased with interest rate hikes since 2022, decided to combat inflation. However, these interest rate increases result in increased spending for the Federal Reserve.

The interest rate policy of the Federal Reserve, led by Powell, has repeatedly caused controversy. Trump, who has called for Powell's resignation in the past, believes an immediate cut in interest rates is urgently needed. At a Cabinet meeting, Trump called Powell a "fool" for his decisions on interest rate policy and suggested that firing the Fed chief was a real possibility.

Answer and legal aspects

In his letter, Vought also asks Powell eleven questions, to which he demands answers within seven business days. Regarding the renovation plans, he asks whether the Federal Reserve made changes without obtaining approval from a relevant government agency. The data basis for the planned renovations was reviewed by the National Capital Planning Commission several years ago.

Powell has stressed that no new luxury features are planned and that some of the reported features are simply incorrect. He announced that there would be no new marble other than replacing damaged sections and dismissed claims that special elevators or water features were part of the project.

The situation remains tense, especially given the looming legal hurdles that could protect Powell's position. A Supreme Court ruling could potentially provide him and other Fed officials with protection from politically motivated firings.

Developments surrounding the Federal Reserve and Jerome Powell continue to be closely monitored as public and political debate continues over his leadership and the institution's financial policies. Continued attention to fiscal conditions and interest rate policy is seen by economists as necessary to promote economic growth while controlling inflation.

For more information visit Market screener and CBS News.