Fed Inspector General Clears Jerome Powell of Criminal Wrongdoing
The Federal Reserve Inspector General cleared former Chair Jerome Powell of criminal misconduct regarding a $2.5 billion headquarters renovation despite citing severe management deficiencies.
The Office of Inspector General of the Federal Reserve released a 120-page report on September 30, 2026, concluding that no criminal law violations or administrative misconduct occurred during the $2.5 billion renovation of the central bank's Washington headquarters. While clearing Jerome Powell of wrongdoing, the watchdog identified critical oversight failures by the Federal Reserve Board of Governors, including the absence of a guaranteed maximum price and a failure to obtain a total cost estimate until January 2026, years after work began.
The project became a political flashpoint in 2025 when President Donald Trump used the spiraling costs to pressure Powell to ease monetary policy. This tension led to a Department of Justice investigation and grand jury subpoenas, which Chief US District Judge James Boasberg blocked in March 2026, ruling they were intended to improperly pressure Powell. Powell broke tradition by remaining on the Board as a governor after his term as chair ended in May 2026 to ensure the investigation reached a transparent conclusion.
Current Federal Reserve Chairman Kevin Warsh has engaged the General Services Administration to complete the project and promised to hire an independent auditor to verify costs. Lawmakers remain divided over the findings; Senator Tim Scott described the overruns as egregious, while Senator Elizabeth Warren stated the report proves there was no basis for a witch hunt against Powell.
