A Federal Reserve inspector general report released September 29 found significant management deficiencies in the central bank’s $2.4 billion renovation of its Washington headquarters but no grounds for criminal referral or administrative misconduct.
The $2.4 billion project, which includes renovations to the Marriner S. Eccles and 1951 Constitution Avenue buildings, saw its budget grow from $1.31 billion in 2020 to $2.38 billion by August 2026, with construction delays pushing completion from 2024 to December 2027. The inspector general’s 120-page review, initiated at the request of then-Fed Chairman Jerome Powell in July 2025, concluded that the Board of Governors failed to implement key cost controls, secure comprehensive initial cost estimates, or establish a maximum budget to mitigate inflation risks.
Key Findings
The report identified deficiencies in project oversight, including the absence of a comprehensive cost estimate at project launch and the failure to enforce a hard budget cap that could have shifted cost overruns to contractors. While the Justice Department opened a separate criminal investigation in January 2026—including grand jury subpoenas related to Powell’s June 2025 testimony to Congress—the inspector general’s office stated it found no reasonable grounds to believe federal criminal law was violated.
Political Responses
The findings prompted sharp reactions from political figures. Former President Donald Trump, who served as Fed chairman during part of the renovation, posted on Truth Social on September 30 that Powell should resign, calling the project “disgraceful” and alleging “gross incompetence.” Trump also urged Attorney General Todd Blanche to review the report and consider legal action against Powell.
Senator Elizabeth Warren (D-Mass.), meanwhile, criticized the Trump administration’s response, stating on X (formerly Twitter) that the report did not justify a “witch hunt.” A separate July 2025 letter from Bill Pulte, then-director of the Federal Housing Finance Agency, urged Congress to investigate Powell over his testimony, alleging “deceptive” statements without providing evidence.
Project Timeline and Cost Growth
The renovation, originally budgeted at $921 million in February 2020, ballooned to $2 billion by December 2024, with total project costs reaching $2.38 billion by August 2026. The inspector general attributed the cost increases to inflation, lack of early cost controls, and delays in project execution. The original completion date of mid-2024 was pushed to December 2027, reflecting the extended timeline.
Inspector General’s Recommendations
The report included recommendations for improved project management, though it did not identify administrative misconduct. The inspector general’s office stated it found no evidence of criminal intent or violations requiring referral to the U.S. Attorney General under the Inspector General Act.
The Federal Reserve has not publicly detailed its response to the report’s recommendations.