Federal Reserve Clears Powell of Criminal Wrongdoing in $2.5 Billion HQ Renovation

The clearance resolves the narrowest of the allegations against the Fed chair, leaving broader questions about monetary policy decisions and congressional testimony to public and legislative scrutiny.

Federal Reserve Chair Jerome Powell has been cleared of criminal wrongdoing related to the central bank's $2.5 billion headquarters renovation project, which critics have referred to as the "Palace of Versailles" renovation, according to a report published October 3, 2026 by the New York Post.

The clearance ends, at least in the criminal context, one of the more pointed controversies of Powell's tenure: whether he misled Congress about the scope and cost of the renovation project. The specific allegation was that Powell may have lied to Congress during testimony about the project's budget. The outcome of any formal congressional referral or Department of Justice review, including which agency or prosecutor conducted the review and when it was initiated, has not been confirmed in publicly available court filings or DOJ press releases as of the date of this article.

The Federal Reserve's headquarters renovation in Washington, D.C., drew scrutiny from lawmakers on both sides of the aisle after costs escalated. A $2.5 billion figure for a government building renovation is among the largest such expenditures in recent federal institutional history, though the precise final appropriated or obligated amount, and the mechanism by which the Fed authorized spending, would be detailed in the Federal Reserve Board's own financial disclosures and annual reports, which are publicly available through the Fed's website.

Powell was first appointed as Federal Reserve Chair by President Donald Trump in 2017 and was reappointed by President Joe Biden in 2021 for a second four-year term expiring in May 2026. His relationship with the executive branch has been publicly contentious at various points. Trump publicly criticized Powell on multiple occasions during both his first and second administrations, including over interest rate decisions. Those criticisms are documented in Trump's public statements and social media posts, and in congressional hearing transcripts available through the Senate Banking Committee's public records.

Powell's tenure has included several consequential monetary policy cycles. The Fed held the federal funds rate near zero from March 2020 through March 2022, then raised it from 0.25 percent to a range of 5.25 to 5.50 percent by July 2023, the most aggressive rate increase cycle since the early 1980s, according to Federal Open Market Committee meeting records published by the Federal Reserve. The Fed subsequently began cutting rates in September 2024. Each of these decisions is documented in FOMC statements and meeting minutes published on the Federal Reserve's website.

The inflation rate, as measured by the Consumer Price Index, reached 9.1 percent year-over-year in June 2022, the highest reading since November 1981, according to Bureau of Labor Statistics data. Critics of Powell's leadership point to the Fed's extended period of near-zero interest rates and bond purchases as contributing to that inflation cycle. Defenders of Powell's approach note that the pandemic created supply and demand disruptions that were not fully predictable in real time, a position reflected in various FOMC meeting minutes from 2020 and 2021.

The renovation controversy intersects with longstanding congressional interest in Federal Reserve transparency and governance. The Fed is an independent agency, and its capital expenditures are not subject to the congressional appropriations process in the same manner as executive branch departments. The Federal Reserve Act governs the institution's finances. Lawmakers from both parties have introduced legislation at various points to increase Fed oversight, though no such bill has been enacted. The relevant bills, if any were introduced in the current Congress, would appear in the congressional record and on Congress.gov.

It is not publicly known from available records which specific congressional committee or committees received testimony from Powell about the renovation, on what dates that testimony occurred, or the precise nature of the allegations that were ultimately resolved by the criminal clearance. Congressional testimony transcripts are publicly available through C-SPAN archives and committee websites, and those records would contain the full exchange at issue.

What remains unknown is whether any congressional investigation or inspector general review of the renovation remains open, whether the Fed has published a full project cost accounting, and whether Powell faces any further civil or administrative review. A full accounting of the renovation's cost and authorization would be found in the Federal Reserve Board's annual report and any Office of Inspector General findings, both of which are public documents.