WASHINGTON, D.C. – The U.S. Department of Justice has served grand jury subpoenas on the Fed (Federal Reserve), putting Chair Jerome Powell in the spotlight over his past comments to Congress about the Fed’s major headquarters renovation.
Powell disclosed the subpoenas in an uncommon video statement on Sunday. His announcement added fuel to a tense fight in Washington, where the long renovation of historic Fed buildings has turned into a broader clash between the central bank and the Trump administration.
Powell said the subpoenas were delivered on Friday. They raise the stakes around his June 2025 testimony before the Senate Banking Committee, where he defended the renovation and rejected claims that the Fed was spending freely.
Powell called some of the allegations “misleading and inaccurate.” He also disputed reports of high-end extras, saying the plans did not include “special elevators,” new water features, rooftop gardens, or extra marble other than replacing damaged historic materials.
Cost Overruns Drive a Growing Fight
The project is a five-year effort to upgrade the Marriner S. Eccles Federal Reserve Board Building, built in the 1930s, along with the neighboring 1951 Constitution Avenue Building. Early estimates put the cost near $1.9 billion.
The Fed has said the work is meant to replace aging systems, improve security, remove hazardous materials discovered during demolition, and protect key historic features. The broader goal is to bring more staff into the two buildings and cut long-term leasing costs.
As work moved forward, the estimate rose to about $2.5 billion, an increase of roughly 30 to 35 percent. Federal Reserve renovation officials point to several drivers behind the jump. They cite larger-than-expected asbestos and lead paint removal, higher construction costs tied to inflation, lingering supply chain problems from recent years, worker shortages, and design and process changes required by historic preservation rules. They also point to oversight from groups such as the National Capital Planning Commission.
Powell has argued that big overruns are not unusual for historic building renovations near the National Mall, where rules can limit what crews can change and how quickly projects move.
Powell Says the Fed Probe Is Political Pressure
In his Sunday statement, Powell strongly criticized the investigation and said it has more to do with politics than building costs. He described the subpoenas as “pretexts,” and he said they fit into a larger push by the Trump administration to pressure the Fed.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said. “It is not about Congress’s oversight role; the Fed, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project.
Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.”
Powell said he has served under four presidents, from both parties, and he framed the moment as a test of Federal Reserve independence. He said scrutiny of a $2.5 billion Fed building project is fair. Still, he called the criminal probe an “unprecedented action” tied to ongoing threats.
Trump Team Calls It Wasteful and “Luxury” Spending
President Donald Trump and his allies have used the Fed headquarters cost overrun as a symbol of government waste. They argue the price increase reflects poor oversight and bad planning under Powell, and they repeat claims that costly add-ons pushed the total higher.
The dispute became highly visible during a July 2025 tour of the construction site, when Trump and Powell both wore hard hats. Trump challenged Powell’s figures during the visit and suggested the real total could be even higher than reported.
Officials in the administration, including Office of Management and Budget Director Russell Vought, have described the renovation as “ostentatious” and questioned whether it meets basic standards for fiscal discipline. Trump has also threatened legal action against Powell for “gross incompetence.” At the same time, he has demanded lower interest rates, saying high rates hurt Americans more than any building repair.
Trump told NBC News on Sunday that he did not know details about the Justice Department’s actions. He added that the only “pressure” Powell should feel is from interest rates that he says are too high.
Washington Watches a High-Stakes Test of Independence and Oversight
The fight has stirred a wider argument about how much sway a president should have over the Federal Reserve, which was built to keep monetary policy separate from day-to-day politics. Critics of the probe, including some Republican senators, warn that targeting the chair could weaken trust in the Fed and rattle markets.
Meanwhile, the Eccles Building renovation and the Constitution Avenue work continue behind scaffolding and heavy equipment. Crews are also working within strict preservation limits, which can slow timelines and raise costs. The project is still expected to finish in late 2027.
Powell said the Fed will cooperate with investigators while defending its actions. “No one, certainly not the chair of the Federal Reserve, is above the law,” he said. As the DOJ grand jury Powell investigation unfolds, it could deepen the strain between executive oversight and central bank autonomy.
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