The ongoing feud between the Trump administration and the Federal Reserve has taken a new turn with the revelation of details about the Fed’s $2.5 billion renovation project.
According to a letter Fed Chair Jerome Powell wrote to senators in July, he provided extensive details about the renovation project, the Financial Times reported on Wednesday. The letter contradicts the probe’s claims that the Fed Chair misled Congress.
Fed’s Details On $700 Million Overrun Amid Probe
The letter, sent about two and a half weeks after Powell’s testimony before the Senate Banking Committee on the project’s cost overruns, was addressed to committee chair Tim Scott (R-SC) and Democrat Sen. Elizabeth Warren (D-Mass.).
It outlined the factors behind the $700 million budget overrun, citing higher costs for materials, equipment, and labor, along with unexpected site conditions, including asbestos and toxic soil contamination.
The Fed’s board approved the project in 2017, with completion scheduled for next year.
Meanwhile, Jeanine Pirro, the U.S. attorney for the District of Columbia, overseeing the criminal probe, told Fox News host Sean Hannity, on Tuesday, that her office issued the subpoenas in part to obtain additional details on “the chairman’s congressional testimony” related to the project. She said the office had requested the information on multiple occasions, but it was ignored.
GOP Warns Powell Probe May Hit Rates
The DOJ’s criminal investigation into Powell has sparked concerns among Republican lawmakers, with some warning that a public clash between the White House and the Fed could push interest rates higher, rather than lower.
Sen. Thom Tillis (R-N.C.) even said he would withhold support for any Federal Reserve nominee advanced by President Donald Trump until the legal issue is settled, a stance that could prevent a nominee from advancing to a full Senate floor vote amid the closely divided Senate Banking Committee.
Echoing the Republicans, economist Justin Wolfers has warned that the Trump administration’s threats to indict Powell could spark hyperinflation fears.
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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