Trump Questions Federal Reserve Building Probe Handoff, Demands Answers on Cost Overruns

President Donald Trump expressed dissatisfaction with the decision to close a federal investigation into the Federal Reserve’s headquarters renovation project, insisting he wants to understand how costs ballooned to nearly $4 billion on a project he claims could have been completed for a fraction of that amount.

“Well, I want to find out,” Trump told reporters Saturday before boarding Air Force One in Florida, responding to questions about U.S. Attorney for the District of Columbia Jeanine Pirro’s announcement that her office would close its investigation into the Federal Reserve. “You know, it’s not dropped. They’re looking into the whole thing about the crisis. What I want, with the IG, what I want to look at is how can a building that I could have done for $25 million cost $4 billion? That’s a big thing.”

The investigation, which has now been transferred to Department of Justice Inspector General Michael Horowitz, had been examining Federal Reserve Chair Jerome Powell’s statements to Congress regarding the management of renovation costs for the central bank’s Washington headquarters.

According to the Federal Reserve’s official explanation, the project had an approved budget of $2.46 billion but exceeded that figure due to unexpected complications including more asbestos than initially anticipated and rising costs during the renovation period.

The probe has been contentious from the start. When Powell revealed the investigation’s existence in January, he characterized it as an unprecedented attempt to use “intimidation” to pressure him to lower interest rates. The investigation emerged amid a deteriorating relationship between Trump and Powell, whom Trump had nominated to the position in 2017.

Trump has repeatedly criticized Powell’s monetary policy decisions, calling him a “fool” in March and demanding immediate interest rate cuts. The Federal Reserve, which operates independently from political influence by design, has maintained higher interest rates to combat inflation, a position that has frustrated the president.

The investigation’s political overtones have drawn criticism from within Trump’s own party. Senator Thom Tillis (R-N.C.), a member of the Senate Banking Committee with a background in finance, had vowed to block the confirmation of Kevin Warsh, Trump’s nominee to replace Powell, whose term was set to expire on May 15.

Tillis accused Pirro of seeking “brownie points” with Trump by opening the investigation and called the DOJ’s probe politically motivated interference with markets. “It’s not cute,” Tillis said during a February television interview.

During Warsh’s confirmation hearing this week, Tillis told the nominee, who previously served on the Fed’s Board of Governors, that despite his “extraordinary credentials,” he could not vote to advance his nomination until the DOJ ended its investigation.

Pirro’s decision to close the probe and transfer it to Inspector General Horowitz may now clear the path for Warsh’s confirmation. Horowitz has served as DOJ inspector general for more than a decade and has received mixed reviews from Republicans. He was one of the few high-profile inspectors general who kept his position during Trump’s significant reduction of government watchdogs last year.

Despite the investigation being transferred away from federal prosecutors, Trump insisted he wants to see it through “for the country,” drawing on his real estate background to emphasize his skepticism about the costs.

“It’s much tougher, much more expensive to build a hotel than an office,” Trump said, referencing his former Trump International Hotel in Washington, D.C., which he sold in 2022 and has since been renamed the Waldorf Astoria.

Trump added that the investigation has implications beyond just this particular project: “Somebody has to find out why that building that should have cost $25 million is costing billions of dollars. And you know why they have to find it out? For other buildings, because that’s not the only one. I think that’s the most egregious example.”

The Federal Reserve renovation saga highlights ongoing tensions between the central bank and the White House, raising questions about the institution’s independence and fiscal management during a time of heightened economic scrutiny.