Headquarters Renovation Turns Political Flashpoint: Trump Accuses "Gross Misconduct"
On December 29th, Eastern Standard Time, U.S. President Donald Trump, at a joint press conference with Israeli Prime Minister Benjamin Netanyahu in Florida, once again targeted Federal Reserve Chairman Jerome Powell. Trump explicitly stated that he is seriously considering a formal lawsuit against Powell for "gross misconduct" and "extreme incompetence." The attack this time is not focused on traditional monetary policy but on the renovation project of the Federal Reserve's headquarters in Washington, D.C. Trump openly criticized the project as grossly over budget and of mediocre construction quality, calling it a "failed project orchestrated by Powell."
According to public information, the renovation of the Federal Reserve headquarters and ancillary buildings was initially approved in 2017 and began in 2021. The project's initial budget was $1.9 billion, but due to "unforeseen factors" such as soil contamination, asbestos removal, and high groundwater levels, the budget has soared to $2.5 billion. Trump is extremely displeased with this, comparing it to his own ongoing White House banquet hall project, accusing Powell of squandering public funds and citing it as evidence of Powell's leadership failure. Previously, White House officials have repeatedly expressed their "very uneasiness" privately or through open letters, considering this "extravagant renovation" a legitimate reason for Powell's dismissal.
Powell Stands Firm: Structural Repairs Must Not Be Delayed
In response to the lawsuit threat and "misconduct" accusations from the White House, Powell has previously issued a strong written rebuttal. He pointed out that the Federal Reserve headquarters complex suffers from serious structural aging issues, with asbestos and lead contamination, and core systems like heating, firefighting, and electricity on the brink of failure. Powell emphasized that every expenditure of the project is to ensure the safety of thousands of employees, and the design had been revised multiple times to minimize costs, contrary to Trump's claim of it being an "extravagant renovation."
Despite Powell's vigorous explanations, the relationship between the two has hit rock bottom. In the interview, Trump expressed an undisguised desire for Powell to step down immediately, bluntly stating, "He should resign; it's good for the country. I really want to fire him." Although legal constraints make it difficult for the President to directly replace the Federal Reserve Chairman simply over policy disputes or administrative disagreements, Trump is attempting to find a way past legal barriers through the legal concept of "gross misconduct."
Countdown to Federal Reserve Succession: New Appointee to be Announced in January Next Year
While criticizing Powell, Trump also revealed the timeline for the succession of the Federal Reserve's top power. Powell's term as Chairman will end on May 15, 2026, meaning the Federal Reserve will witness its first "regime change" in eight years next year. Trump stated that his shortlist of candidates is almost finalized, with an official announcement of the nominee for the next Federal Reserve Chairman expected in January 2026.
Currently, White House economic adviser Kevin Hassett and former Federal Reserve governor Kevin Warsh are seen as the strongest contenders. Trump made it clear he needs a leader who can be more flexible with the administration and more aggressive in interest rate policy. As the "successor" list becomes imminent, Powell's term is essentially entering a "caretaker phase," and this $2.5 billion renovation dispute may just be the prelude to Trump's comprehensive overhaul of the Federal Reserve.
