There has been little media coverage of this issue, but the Wall Street Journal editorial page is calling for Jerome Powell to resign today. Remarkably, President Trump had already raised similar concerns before the editorial was published.
Trump criticized Powell on several fronts, calling him “a disaster” and accusing him of being “too late with interest rates.” Regarding the Fed headquarters renovation, Trump claimed the project could have been completed for $25 million rather than the current cost, arguing he would have preserved the original walls and ceilings rather than replacing them with sheetrock. He also noted that new electrical and HVAC systems could have been installed without demolishing the building’s architectural features, and criticized the lack of insulation as being unbudgeted and inexpensive to fix.
The Journal’s editorial board, referencing Inspector General Michael Horowitz’s report, acknowledged the project suffered from significant incompetence but found no criminal wrongdoing. Horowitz described the situation as “a long and expensive comedy of errors,” noting that Fed economists repeatedly changed building designs and that contracts were poorly written. The Journal likened the management to “the faculty lounge trying to build a new football stadium.”
The article notes that new Fed Chairman Kevin Warsh has transferred the rebuilding project to the General Services Administration, which has more experience with federal construction projects.
While Horowitz identified management deficiencies, he found no administrative misconduct, meaning Powell is unlikely to face legal consequences for the mismanagement that occurred during his tenure.
The Journal argues that with Powell now legally cleared, “this clears the path for Mr. Powell to resign in line with tradition and do his part to de-escalate the unhelpful political battles that have ensnared the Fed.” The question remains whether Powell will step down.
Critics view Powell as a politicized chairman who prioritized diversity, equity, and inclusion initiatives, climate change concerns, and loose monetary policy during the Biden administration.
The commentary suggests Democrats believe they are winning midterm elections on affordability, yet notes that during their previous tenure, policies supported by the Fed contributed to 9 percent peak inflation and over 21 percent cumulative inflation through $7 trillion in monetized spending.
Regarding energy costs, the article criticizes Democratic climate policies for targeting fossil fuels and taxing gasoline, citing California’s $6.50 per gallon price as $2 above the national average. It concludes that while Powell may not be criminally liable for the building scandal, he was complicit in what the author describes as big-government socialist policies during the Biden years.