The ballooning price tag for the $2.5 billion renovation of the Federal Reserve’s Washington, D.C. headquarters has become the pressure point for efforts by President Trump and his administration to force the central bank’s chairman, Jerome Powell, to either lower interest rates or step aside.
Since the beginning of his second term, Trump has repeatedly criticized Powell—who he himself nominated to run the nation's central bank during his first term—for the board’s refusal to lower interest rates, a decision the president and his advisors believe is holding back economic growth. Trump has escalated his attacks in recent weeks, even floating the idea of removing Powell from his role before his term expires in May 2026.
Now, administration officials have zeroed in on the Federal Reserve’s renovation project to put pressure on Powell. The Federal Reserve Act, which established the central bank, grants the president the power to nominate the chairman for one four-year term from among the bank’s current governors. However, the law only provides the president with the power to remove the chairman “for cause.” Federal courts have historically interpreted this to mean serious misconduct as the Supreme Court defined it in Humphrey’s Executor v. United States in 1935.
