Federal Reserve Chair Powell under criminal investigation over HQ renovation
Investigation focuses on whether Powell was truthful about $2.5B project during congressional testimony
President Donald Trump threatened to sue Federal Reserve Chair Jerome Powell over the central bank's costly renovation project.
The U.S. attorney’s office for the District of Columbia has opened a criminal investigation into Federal Reserve Chair Jerome Powell, focusing on the renovation of the central bank’s Washington headquarters and whether he was truthful in his congressional testimony about the project.
Officials told The New York Times, which was first to report the probe, that it centers on whether Powell accurately characterized the scope and cost of the renovation during congressional appearances.
THE FED’S $2.5B RENOVATION IS IRKING PRESIDENT TRUMP AND TEAM
Jerome Powell, chairman of the U.S. Federal Reserve, during the Federal Reserve Board open meeting in Washington, DC, US, on Wednesday, June 25, 2025. (Al Drago/Bloomberg via Getty Images / Getty Images)
Powell confirmed the Federal Reserve had been served. He said he respected the rule of law and congressional oversight but described the Justice Department’s move as "unprecedented" and politically motivated.
"This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings," Powell said in a video statement Sunday evening.
"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," he added.
The White House did not immediately respond to Fox News Digital's request for comment.
U.S. President Donald Trump and Federal Reserve Chair Jerome Powell speak during a tour of the Federal Reserve Board building, which is currently undergoing renovations, in Washington, D.C., July 24, 2025. (REUTERS/Kent Nishimura / Reuters)
Tensions between President Donald Trump and Powell have simmered over the central bank's interest rate decisions and broader monetary policies. Trump has instructed the Fed to cut rates, which he says could save the nation "hundreds of billions of dollars."
Powell held the benchmark rate at 4.25% to 4.5% as the Fed took a wait-and-see approach to assess the impact of Trump’s sweeping tariffs. While the central bank has since lowered rates, Trump’s attacks on Powell, whom he appointed in 2017, have increasingly taken on a personal tone, including the use of mocking nicknames.
A LOOK AT THE UNFOLDING BATTLE BETWEEN TRUMP AND POWELL OVER FED POLICY
That strained relationship has increasingly extended beyond monetary policy.
The renovation of the Federal Reserve's two main office buildings in Washington’s Foggy Bottom neighborhood is estimated to cost $2.5 billion and is being funded by the central bank itself, not by taxpayers.
The Fed is self-financing and does not rely on congressional appropriations to cover its operating expenses, which include employee salaries, facilities maintenance and the current renovation. Its primary income comes from interest earned on government securities and fees charged to financial institutions.
The grand atrium of the Marriner S. Eccles Federal Reserve building during a media tour of the renovation of the central bank's headquarters in Washington, D.C., on July 24, 2025. (Andrew Harnik/Getty Images / Getty Images)
In June 2025, Powell told members of the Senate Banking Committee that "There’s no new marble. There are no special elevators. They’re old elevators that have been there. There are no new water features. There are no beehives, and there’s no roof garden terraces."
Powell also told lawmakers that no one "wants to do a major renovation of a historic building during their term in office."
"We decided to take it on because, honestly, when I was the administrative governor, before I became chair, I came to understand how badly the Eccles Building really needed a serious renovation," Powell said, adding that the building is "not really safe" and not waterproof.
TOP TRUMP OFFICIAL SLATED TO INSPECT FED'S $2.5B RENOVATION AMID COST SCRUTINY
The main two-story board room of the Marriner S. Eccles Federal Reserve building during a media tour of the renovation of the central bank's headquarters in Washington, D.C., on July 24, 2025. (Andrew Harnik/Getty Images / Getty Images)
He also said that the cost overruns are due, in part, to unexpected construction challenges and the nation's inflation rate.
The project is expected to be completed in the fall of 2027, with Washington-based employees expected to begin working in the building in March 2028.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Trump has previously threatened legal action over the renovations and mocked the project’s cost and design.
"They’re building a basement into the Potomac River. I could have told them that’s very tough to do, and it doesn’t work, and it’s very expensive," Trump said. "But they’re up to $4 billion, headed by this clown," he added in November, referring to Powell.
The project is scheduled for completion in the fall of 2027, with Washington-based employees expected to begin occupying the building in March 2028.