Jan. 13, 2026 — Washington, D.C. President Donald Trump has directed the Justice Department to investigate the Federal Reserve, threatening criminal charges against Chair Jerome Powell primarily over a $2.5 billion renovation of the central bank’s headquarters buildings, amid accusations that the move is intended to pressure interest rate policy.
The probe, which includes subpoenas served to the Fed, focuses on alleged cost overruns in the project for the Marriner S. Eccles Building and an adjacent structure, originally budgeted at $1.9 billion.
Costs escalated due to inflation, asbestos removal, and historic preservation requirements. Trump has described the expenses as the “highest price of construction per square foot in the history of the world” and indicative of “gross incompetence.”
Powell, in a statement issued Sunday, dismissed the threats as “pretexts” in Trump’s campaign to seize control of U.S. interest rate policy from the Fed’s technocrats.
“there’s no new marble. … there are no special elevators.”
Powell testified during a June Senate Banking Committee hearing.
Trump visited the renovation site in July, standing next to Powell and commenting, “they have to get it done … Look, there’s always Monday morning quarterbacks. I don’t want to be that. I want to help them get it finished.” However, at a December 29 news conference, he indicated his administration would “probably” sue Powell.
The White House Press Secretary Karoline Leavitt stated that Trump did not direct the Justice Department to investigate Powell. Trump told NBC News on Sunday that he knew nothing about the probe and denied using it to influence rates: “No. I wouldn’t even think of doing it that way.”
Background includes Trump’s August firing of Fed Governor Lisa Cook over mortgage fraud allegations, which she denies; her case heads to the Supreme Court on January 21. Powell’s chair term ends in May, with his governor role extending to 2028.
Senate Banking Committee Chairman Tim Scott questioned Powell in June about features like “rooftop terraces, custom elevators that open into VIP dining rooms, white marble finishes, and even a private art collection,” claims the Fed refuted.
The Fed, self-financed through Treasury interest, argues the renovations will save money long-term by consolidating staff and cutting rent. Economists warn that politicization could harm the Fed’s credibility and raise Treasury yields.
Trump’s own privately funded $250 million White House East Wing ballroom renovation has drawn hypocrisy charges.
The project dates to Trump’s first term, with a third building renovation canceled in 2024 due to costs.
