Federal Reserve Chair Jerome Powell is facing mounting accusations from lawmakers and former officials who say he misled Congress about the scope and cost of a $2.5 billion renovation to the Fed's Washington headquarters. During sworn testimony before the Senate Banking Committee, Powell denied that the project includes luxury amenities, contradicting existing federal planning documents.
"There's no VIP dining room, there's no new marble. There are no special elevators," Powell said during the hearing last week. "There are no new water features, there's no beehives, and there's no roof terrace gardens."
But planning documents filed with the National Capital Planning Commission in 2021 and never revised since indicate otherwise. "The private dining rooms on Level 4 (of the Fed's Eccles building) will be restored," reads one section. Another notes, "The Governors' private elevator will be extended to discharge at the dining suite level." Other features include "vegetated roof terraces" to support "urban wildlife and pollinators," as well as new marble and water features.
Andrew T. Levin, a Dartmouth economics professor and former Fed adviser, urged Congress to take action. "A top Fed official cannot be permitted to make false statements under oath at a congressional hearing," Levin said. "Such statements must be promptly corrected, and in egregious cases, subject to censure by the Senate."
Sen. Cynthia Lummis (R., Wyo.), a member of the Banking Committee, said Powell "was clearly not prepared for his testimony, and should be embarrassed." She added, "He made a number of factually inaccurate statements to the Committee regarding the Fed's plush private dining room and elevator, skylights, water features, and roof terrace."
The Federal Reserve declined to comment.
Sen. Tim Scott (R., S.C.), who chairs the Senate Banking Committee, criticized the renovation as "luxury upgrades that feel more like they belong in the Palace of Versailles."
The price tag for the headquarters overhaul has surged 30% from its original $1.9 billion estimate, triggering further scrutiny as the central bank operates under a rare period of sustained financial losses. The Fed posted a $114.6 billion loss in 2023, and its cumulative losses over the past three years have reached $233 billion.
These losses stem from a mismatch between rising interest payments on bank reserves and the declining income from the Fed's bond holdings, following Powell's aggressive rate hikes to fight inflation during the Biden administration.
Officials have insisted that the losses, while unprecedented, do not impair the Fed's ability to execute monetary policy. Under normal conditions, the Fed remits profits to the U.S. Treasury. With losses mounting, those remittances are suspended until the so-called "deferred asset" is paid down.
The controversy over the renovation gained traction after The New York Post published internal planning documents earlier this year. The revelations drew criticism not only from Congress but also from former officials. Elon Musk, who led the short-lived Department of Government Efficiency, called the project "an eyebrow raiser," and said DOGE should "definitely" investigate.
By comparison, JPMorgan Chase's new 60-story headquarters in Manhattan, designed by Norman Foster, is expected to cost $3 billion-just $500 million more than the Fed's renovation budget.
