Fed's Powell didn't break law, watchdog says. Trump wants him out - USA Today
President Donald Trump once again called for Jerome Powell to resign from the Federal Reserve after the central bank's internal watchdog said it found no evidence that a multibillion-dollar project at the Fed's headquarters violated federal law.
In a 120-page report, the Fed’s independent inspector general said that although poor project management likely increased the renovation's $2.5 billion price tag, "at no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred."
"While our report outlines deficiencies in the management of the renovation project, resulting in our recommended corrective actions in accordance with the Inspector General Act, we did not identify administrative misconduct during our evaluation," the report said.
The pricey overhaul of the Fed's headquarters drew scrutiny from President Donald Trump and led to an ultimately short-lived Department of Justice criminal investigation into the central bank and its former chair, who remains on the Fed's Board of Governors.
In a Truth Social post reacting to the inspector general's findings, Trump said he asked Attorney General Todd Blanche to study the report, and "make a determination as to what to do about a relatively small Building Complex that is Hundreds of Millions of Dollars over budget."
"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 continued. "He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy."
The Fed, including Powell, recently unanimously voted to raise the federal funds rate to a range of 3.75% to 4%. It was the first rate hike in three years, and the first time the Fed voted to change rates at all under new Chair Kevin Warsh.
At the time, former Fed chairs criticized the criminal inquiry into Powell as "an unprecedented attempt to use prosecutorial attacks to undermine" the institution's independence. In a rare video statement, Powell himself said he viewed the probe as a “pretext," implying it was a response to the Fed’s unwillingness to set monetary policy based on the president’s preferences.
The DOJ dropped the investigation in April after Sen. Thom Tillis, R-North Carolina, cited it as the reason he was withholding his support for Warsh's confirmation to replace Powell as the central bank's leader. After it was dropped, U.S. Attorney for the District of Columbia Jeanine Pirro said the Fed's inspector general would look into the building cost overruns instead. Tillis voted in support of the nomination, and Warsh was sworn in in May.
Powell's term as a Federal Reserve governor — where he is one of 12 committee members that vote to set a benchmark for short-term interest rates — ends on Jan. 31, 2028. He told reporters in March that he planned to remain on the Board of Governors until the investigation is "truly over."
(This story was updated to add new information.)
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