Trump Asks AG To Do What?

President Donald Trump is demanding additional scrutiny of the Federal Reserve’s massive Washington headquarters renovation after a federal watchdog found serious problems with the way the project was managed.

The Federal Reserve’s Office of Inspector General said construction costs for renovations to two historic buildings more than doubled from $921 million in the Fed’s February 2020 budget to approximately $2.018 billion in its revised 2024 construction budget.

The overall Board-approved budget for the renovation is now approximately $2.46 billion.

Trump responded by saying he had asked Attorney General Todd Blanche to review the inspector general’s findings and determine whether additional legal action should be considered.

The controversy is putting renewed attention on government spending, construction oversight and accountability at one of the nation’s most powerful financial institutions.

Watchdog Finds Major Problems With Federal Reserve Renovation

The inspector general’s September 29, 2026, report found significant weaknesses in the Federal Reserve Board’s management of the project.

According to the watchdog, the Board did not effectively manage its construction contract and repeatedly departed from cost-control provisions intended to reduce financial risk.

Investigators said officials failed to use several available measures that could have helped control expenses and limit some of the project’s substantial cost increases.

The report also concluded that the Board’s internal governance structure was inadequate for a construction project of this size and complexity.

The inspector general issued seven recommendations, and the Federal Reserve agreed with all of them.

Construction Costs More Than Double

The increase in construction costs is one of the most significant findings in the report.

The inspector general said the project’s construction budget climbed from:

$921 million in February 2020

to

$2.018 billion in the revised 2024 budget.

That represents an increase of more than $1 billion.

The Federal Reserve separately lists the total Board-approved project budget at about $2.46 billion.

The renovation involves the historic Marriner S. Eccles Building and the neighboring 1951 Constitution Avenue building in Washington, D.C.

Both buildings require extensive modernization, including structural work and replacement of aging electrical, plumbing, heating, ventilation and fire-suppression systems.

Fed Waited Years for Major Construction Estimate

The inspector general also raised concerns about the Federal Reserve’s relationship with its construction manager.

According to the report, the Board did not obtain its first formal construction cost estimate from the construction manager until January 2026, years after construction had begun.

By July 2026, the Fed still had not established a guaranteed maximum price with the construction manager.

The watchdog said that arrangement left the Board without full cost certainty while allowing it to retain significant financial risk.

The report concluded that stronger use of the contract’s original cost-management provisions could have helped limit some of the increases.

Trump Calls Situation Unacceptable

Trump sharply criticized the findings and argued that the renovation represents a major failure of financial oversight.

He described the situation as extraordinary and predicted the ultimate cost could climb substantially higher than the current budget.

Trump suggested the final price could eventually reach between $3.5 billion and $4 billion.

That figure is Trump’s own projection. It is not an estimate from the Federal Reserve inspector general.

The currently approved Fed budget remains approximately $2.46 billion.

Trump Targets Jerome Powell

Trump also blamed former Federal Reserve Chairman Jerome Powell for the problems surrounding the renovation and called for Powell to resign from the Federal Reserve Board.

He further suggested that Powell could face legal action over his handling of the project.

However, the inspector general’s review did not find criminal or administrative misconduct connected to the renovation, according to Reuters.

The report instead focused on deficiencies involving contract management, cost controls and project oversight.

That distinction is important because management failures and criminal wrongdoing are separate issues.

Federal Reserve Defends Need for Renovation

The Federal Reserve says the renovation is necessary because both historic buildings contain aging infrastructure and have not undergone comprehensive modernization since they were constructed.

According to the Fed, the project includes:

• Removing asbestos and lead contamination
• Replacing outdated electrical and plumbing systems
• Replacing heating, ventilation and air-conditioning equipment
• Updating fire detection and suppression systems
• Improving building security and accessibility
• Performing major structural work
• Preserving historically significant architectural features

The Federal Reserve says unexpected conditions also contributed to rising costs, including more asbestos than originally anticipated, contaminated soil and a higher-than-expected water table.

Historic Features Remain Part of the Dispute

Trump has also criticized the architectural changes made during construction, arguing that some of the buildings’ original character has been lost.

The Federal Reserve presents a different account.

The central bank says the project was specifically designed to preserve important historic elements, including stonework, marble, façades, historic meeting rooms and original elevators.

It says restoration work is also being conducted in historically important spaces connected to World War II-era meetings and other major events in U.S. history.

Fed Says Renovation Could Lower Long-Term Expenses

Federal Reserve officials have also argued that the project could reduce operating expenses over time.

The Board currently leases commercial office space to house some employees.

Once the renovations are completed, the Fed says it will be able to consolidate more of its workforce into buildings it already owns and reduce spending on outside office leases.

The Fed also says some planned features were scaled back or eliminated as construction costs increased.

In 2024, the Board canceled a separate renovation planned for its New York Avenue building because of rising expenses.

Seven Recommendations Could Change How Project Is Managed

The inspector general concluded that Federal Reserve officials had multiple opportunities to strengthen oversight and better control costs.

Its seven recommendations call for improvements in areas including contract administration, project governance and financial controls.

The Federal Reserve agreed with all seven recommendations.

That means the next stage of the controversy will likely focus not only on how the costs grew so dramatically, but also on whether the Federal Reserve can prevent additional overruns before the renovation is completed.

Questions Over Federal Spending Remain

The Federal Reserve headquarters project is now likely to face continued scrutiny because of the dramatic difference between its original construction estimate and its current price tag.

The inspector general documented substantial shortcomings in project management while stopping short of finding criminal misconduct.

Trump, meanwhile, is calling for additional legal examination and arguing that those responsible should be held accountable.

For Americans concerned about the management of major public institutions, the central question is straightforward:

How did a construction project budgeted at $921 million grow to more than $2 billion in construction costs—and what controls will be put in place to keep the price from climbing further?