Watchdog clears Powell of misconduct in Fed renovation with rising costs

The Federal Reserve’s inspector general on Sept. 29-30, 2026 released a 120-page report finding no reasonable grounds that a federal criminal law violation occurred and no administrative misconduct by Jerome Powell in the headquarters renovation. Approved costs rose from about $1.32 billion in early 2020 to an estimated $2.38 billion by end of 2024. The OIG said the Board raised the budget as costs escalated, “creating a pay-as-you-go approach,” with limited senior review of budget and scope decisions, while inflation, limited bidding, design changes, and site conditions also drove increases. Donald Trump said it was “possible there's fraud involved” and pressed for Powell’s ouster. DOJ subpoenaed Powell in January over June 2025 Senate testimony; Judge Boasberg quashed the subpoenas in March, and DOJ dropped the probe in April. Jeanine Pirro said she will not hesitate to restart a criminal investigation if facts warrant. The OIG said they do not. Kevin Warsh concurred with the findings and said he is determined all recommendations be carried out systematically. Powell, succeeded as chair by Warsh in May, remains on the Board of Governors. Recommendations include GSA project management and an independent cost review.