Trump's Strategy to Oust Fed Chair Jerome Powell Using the Eccles Building Renovation

Trump's Strategy to Oust Fed Chair Jerome Powell Using the Eccles Building Renovation

As of July 16, 2025, President Donald Trump has publicly signaled his intent to remove Federal Reserve Chair Jerome Powell, leveraging allegations of mismanagement and misrepresentation surrounding the Fed's ongoing $2.5 billion renovation of its headquarters, the Marriner S. Eccles Building in Washington, D.C.

 This approach represents a creative workaround to legal barriers preventing the president from firing the Fed chair over policy disagreements, such as Trump's frustration with Powell's reluctance to cut interest rates more aggressively.

 Instead, Trump is framing the renovation issues as potential "for cause" grounds for dismissal, including misconduct or dereliction of duty

Legal Constraints and the "For Cause" Loophole

The Federal Reserve's independence is enshrined in law, and a Supreme Court ruling has clarified that the president cannot remove the Fed chair for policy differences alone.

 However, dismissal is permissible "for cause," which could include inefficiency, neglect of duty, or malfeasance in office.

 Trump's team is attempting to substantiate such claims by accusing Powell of:

• Mismanagement of Funds: The renovation budget has escalated from initial estimates of about $1.9 billion to $2.5 billion, attributed to inflation, supply chain issues, unexpected asbestos removal, and local building height restrictions requiring more underground work

• 
  Trump has called the spending "disgraceful," stating, "When you spend $2.5 billion on, really, a renovation, I think it's really disgraceful."

• 
  

• Misrepresentation in Testimony: During congressional hearings, Powell denied the inclusion of luxurious features like "rooftop terrace gardens," "VIP dining rooms," "premium marble," "water features," and "special elevators."

• 
  White House officials, including budget director Russ Vought, have countered in letters that the original plans included these elements, labeling the project "ostentatious."

• 
  Trump alleges this constitutes lying to Congress, which could qualify as misconduct.

• Violation of Approval Processes: The White House claims the Fed scaled back parts of the project (e.g., canceling renovations for a third building in 2024) without resubmitting changes to the National Capital Planning Commission, potentially breaching procedural requirements.

• 
  White House deputy James Blair has indicated plans to scrutinize these modifications.

If pursued, Trump could initiate removal proceedings by notifying Powell and Congress, potentially leading to a legal challenge where courts would assess if the "for cause" threshold is met.

 Legal experts, however, view this as a stretch, arguing that building management issues may not rise to the level of disqualifying misconduct.

Details of the Renovation Project

The Eccles Building, constructed in the 1930s and named after former Fed Chair Marriner Eccles, houses the Fed's Board of Governors and requires its first comprehensive overhaul.

 Key aspects include:

• Updating nearly obsolete electrical, plumbing, HVAC, and fire safety systems.

• Removing hazardous materials like asbestos.

• Consolidating the Fed's approximately 3,000 Washington-based employees into fewer buildings to reduce long-term leasing costs.

The project, which began during Trump's first term, has faced delays and cost overruns, with an additional $600 million added due to unforeseen challenges.

 The Fed defends the expenditures, noting they will yield savings over time, and has requested an independent audit by its inspector general to verify costs.

Historical Context and Motivations

Trump's animosity toward Powell dates back to his first term, when he appointed him in 2018 but later criticized him for raising rates, calling him an "enemy" worse than China's leader.

 Now, with inflation concerns persisting, Trump seeks a more dovish Fed to lower rates and stimulate the economy ahead of midterms.

 Advisers have ramped up this campaign as part of a broader push for monetary easing, using the renovation as "new scaffolding" for removal.

Reactions and Potential Implications

The strategy has sparked bipartisan concerns about eroding the Fed's independence, which could lead to market volatility, higher borrowing costs, and economic instability.

 On X, reactions range from alarm over threats to financial stability to skepticism about the accusations' validity.

 Powell has emphasized the Fed's accountability to Congress, not the executive branch, and denied the lavish features outright.

 If successful, this could set a precedent for politicizing the central bank, though experts warn of severe backlash, including investor panic and inflation risks.

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