(Mike Maharrey, Money Metals News Service) The Federal Reserve’s Washington, D.C. headquarters is getting an expensive facelift, and it appears Fed Chairman Jerome Powell lied about it to Congress.
According to reporting by the New York Post, the cost of the taxpayer-subsidized renovation approved in 2019 has ballooned by nearly 32 percent. The original estimate called for spending $1.9 billion. The price tag has reportedly soared to over $2.5 billion due to significant cost overruns.
Meanwhile, the Fed is hemorrhaging money. It reported a $77.6 billion operating loss in 2024, including unrealized losses on its Treasury and mortgage-backed security holdings totaling $1.06 trillion.
Former Fed board member and current Dartmouth College economics professor Andrew Levin has criticized the Fed for the opulent nature of some of the renovations, likening the central bank to the French monarchy.
“The Federal Reserve is building the Palace of Versailles on the National Mall.”
According to the Post, the plan calls for “rooftop garden terraces, skylights, ornate water features, and a new elevator system that allows board members to be dropped off directly in their VIP dining suite.”
Former White House Office of Budget Management staffer Joe Grogan called the cost of the renovations “crazy.”
“It’s a long-held axiom that any time a corporation builds an extravagant new headquarters, it’s time to sell the stock,” said Grogan, who oversaw domestic healthcare spending of $1.3 trillion during his two-year stint at the spending watchdog.
“Let’s hope the Feds’ new HQ doesn’t mean that we’re headed for a crash.”
In April, Levin called on Congress to “put its foot down and take a closer look at this to determine what authority the Fed has to spend this on its buildings.”
Did Powell Lie?
Levin got his wish last month when the Senate Banking Committee grilled Powell about the renovations.
Under questioning during a June 25 hearing, the Fed chairman called the New York Post report “misleading and inaccurate.”
“There’s no VIP dining room. There’s no new marble. There are no special elevators. There are no new water features, there’s no beehives, and there’s no roof terrace gardens.”
Powell also brushed off concerns about the cost overruns, saying they “are what they are.”
According to the Post, Powell’s statement contradicts publicly available planning documents on file at the National Capital Planning Commission. The plans were signed off on in 2021, and there is no indication that they were ever revised.
One excerpt in the filing reads, “The private dining rooms on Level 4 (of the Fed’s Eccles building) will be restored.” Another excerpt states, “The Governors’ private elevator will be extended to discharge at the dining suite level.” According to the Post, the documents also expressly mention “vegetated roof terraces” that will welcome “urban wildlife and pollinators” as well as new marble and water features.
Echoing Levin’s sentiments, Senate Banking Committee Chair Sen. Tim Scott (R-S.C.) said the “luxury upgrades” to the Fed building “feel more like they belong in the Palace of Versailles.”
Levin called on Congress to punish the Fed chair for lying.
“A top Fed official cannot be permitted to make false statements under oath at a congressional hearing. Such statements must be promptly corrected, and in egregious cases, subject to censure by the Senate.”
Sen. Cynthia Lummis (R-Wyo.) told the Post that Powell “was clearly not prepared for his testimony and should be embarrassed.”
“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. This is typical of the mismanagement and ‘don’t bother me’ attitude that Chair Powell has always shown.”
If Powell can play fast and loose with the truth about renovation costs before a Senate committee, what else is he lying about?
One can’t help but think back to all those times the Fed chair insisted inflation was “transitory.”
Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
