'Jerome Should Be Forced To Resign': Trump Wants Powell Out Despite Fed Watchdog Clearing Him What Was The Allegation?

(MENAFN- Live Mint) US President Donald Trump has called for former Federal Reserve Chair Jerome Powell to resign from the central bank's Board of Governors over the renovation of the Fed's Washington headquarters controversy. This is despite the fact that an internal watchdog found no evidence of criminal wrongdoing.

The Fed's Office of Inspector General (OIG), in a report released Wednesday, said it found no“reasonable grounds to believe that a violation of federal criminal law had occurred.” The report also did not identify any“administrative misconduct” in the $2.4 billion renovation project.

So, what exactly was the allegation against Powell?

The controversy centres on the cost and management of the renovation of the Fed's headquarters. The project was initially estimated at about $1.3 billion in 2020, but later it rose to $2.4 billion.

The central bank said several management failures contributed to the cost increases. It noted that the Fed's board had failed to act on problems identified during an earlier project and had not implemented the necessary actions.

Other issues pointed out by the OIG included substantial cost increases due to a lack of bids for some work and internal governance that, according to the report, wasn't equipped to run a project of this magnitude and complexity.

Design changes, site conditions and inflation were other factors cited by the OIG. The Fed has said the cost of the renovation was largely due to the challenges of building - particularly underground - in what was once a swamp near the Tidal Basin along the Potomac River.

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The OIG also concluded that the Fed's internal governance structure was not equipped to manage a project of this size and complexity.

“At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the US Attorney General in accordance with the Inspector General Act,” the Fed's Office of Inspector General said.

Trump nevertheless blamed Powell directly

“This is Jerome Powell's fault, and he should be forced to resign, IMMEDIATELY!” Trump posted on social media. He added that if Powell did not resign, he should be sued by the US government for“either corruption or incompetence”.

Trump also said he had asked Attorney General Todd Blanche to examine the inspector general's report and determine what action should be taken.

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Current Fed Chair Kevin Warsh said the central bank would implement the watchdog's recommendations.

“There are important lessons to be learned, and those lessons, combined with your conclusions and with recommendations from GSA, will have permanent value for our successors on the Board of Governors,” Warsh wrote in a letter to Michael Horowitz, the IG who was appointed to the job by Powell in June 2025.

The renovation controversy has become part of the broader clash between Trump and Powell. During Powell's tenure as Fed chair, Trump repeatedly criticised him over interest-rate policy and also used the headquarters project to attack the central bank chief.

Powell's term as chair ended in May, but he remained on the Fed's Board of Governors. His term as governor runs until January 2028.

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