Main summary
The director of the Office of Management and Budget (WBO), Russell Vought, accused the president of the Federal Reserve, Jerome Powell on Thursday, of carrying out a “ostentatious” reform at the fiscal headquarters of the Central Bank, in the midst of an increasingly aggressive campaign of President Trump to force Powell’s resignation.
Key data
Voucht said Powell leads a project with an extra cost of 700 million dollars and has modified the renewal plan without the corresponding approval of the National Capitol Planning Commission.
The accusation is based on Powell’s testimony before the Senate Banking Committee in June, where he said that certain luxury elements had been eliminated, such as water sources, new marble and gardens in terraces. Vaught said that testimony “seems to reveal that the project does not meet the approved plan.”
In a letter, Voucht asked Powell to answer within seven business days a series of questions about renovations, including whether the elements questioned continue to be part of the final plan.
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The project, which began in 2019 and is valued in billions of dollars, has become the new target of criticism by the White House, which seeks to press Powell to resign.
Initially, it was estimated that the renovations would cost 1.9 billion dollars, but by 2023 the figure had risen to almost 2.5 billion dollars, according to The Wall Street Journal. The increase is attributed to significant increases in the price of steel, cement, wood and other materials, which far exceeded the standard costs of costs.
Additional data
The former head of the Government Efficiency Department, Elon Musk, also described the renovations at the Federal Reserve headquarters as “suspects” in an interview with journalists in May.
Key context
On Tuesday, Trump requested an investigation into Powell’s previous renovations and statements to the Senate, reiterating his desire that Powell will resign immediately. Trump, who appointed him in 2017, has several occasions to take too long to lower interest rates from his arrival to the presidency. According to The Wall Street Journal, Trump would already be considering possible replacements in case of Powell’s early resignation and could announce his choice as soon as in September.
Soser context:
Powell reiterates that the Fed expects to see the impact of tariffs before lowering rates
What to observe
Several Republican senators have begun to rule against Powell. At least three – Bernie Moreno (Ohio), Tommy Tuberville (Alabama) and Rick Scott (Florida) – have asked for their resignation. Others, such as John Kennedy (Louisiana), have remained neutral and stressed the importance of the Federal Reserve maintaining its independence. Kennedy declared Axios: “I don’t think a group of politicians should tell the Federal Reserve how to regulate.”
This note was originally published in Forbes United States
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