Trump demands Jerome Powell resign from Fed board over renovation

President Donald Trump called Wednesday for former Federal Reserve Chair Jerome Powell to resign from the central bank's Board of Governors, citing a watchdog report on cost overruns at the Fed's Washington headquarters renovation.

"The Building is over budget, at a Record Setting rate and, at a minimum, 'Too Late' Powell should be forced to resign from the Board," Trump posted on social media, according to Bloomberg . Trump added that if Powell refused to resign, he should be sued by the United States government "for either corruption or incompetence." The president also said he directed Attorney General Todd Blanche to review the inspector general's report and determine next steps.

The Fed's Office of Inspector General found no grounds for a criminal referral in a report released Wednesday. "At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred," the watchdog said. The report also found no administrative misconduct.

The watchdog did, however, identify a series of management failures. The Fed's board did not establish a guaranteed maximum price for the project even after more than four years of construction, and it did not act on lessons from cost overruns on a prior project. Limited subcontractor bidding, design changes, inflation, and challenging site conditions all contributed to rising costs, the report found. The mid-construction shift from closed offices to open workspaces extended the project's duration and increased its exposure to rising prices, according to the inspector general.

The renovation budget stood at $921 million when the board approved the project in February 2020 and has since grown to approximately $2 billion in the most recently revised estimate. The initial estimate cited by the Trump administration is $1.3 billion.

Fed Chair Kevin Warsh, in his response to the report, announced that the General Services Administration would assume the role of project executive and that the Fed would bring in an outside auditor to examine all costs incurred so far. The board concurred with all seven of the inspector general's recommendations.

Jerome Powell stepped down as Fed chair when his term expired in May but remained on the board as a governor, a position that runs to January 2028. Under the Federal Reserve Act, a governor may only be dismissed by the president if there is "for cause" justification, according to Bloomberg.

Disputes over the renovation project had repeatedly surfaced as a point of contention between the White House and the central bank. The Justice Department ended a criminal investigation of Jerome Powell earlier this year, referring the matter to the inspector general whose report was released Wednesday.