OPINION: Powell’s Fed has committed $2 billion with no cap, and Trump sees only one culprit

The price will come later

The Federal Reserve will soon have a price cap for its headquarters. It will be set after the contracts are signed.

Kevin Warsh has been chairing the Fed since May. On September 29, he promised this guaranteed price cap. He wants it “promptly.”

The general contractor submitted its proposal in January. It totals $2.135 billion. According to the inspector general’s report, $2.078 billion had already been allocated.

In August, the board was still hesitant to sign. “Almost everything had already been awarded,” he told the inspector.

The construction project covers two buildings. The Eccles Building dates back to 1937. Its neighbor is located at 1951 Constitution Avenue. In the Eccles Building, according to council documents, some air-handling units had been in service for twenty-six years. They were designed to last twenty. Council photos, reproduced in the report, show old, abandoned pipes that are leaking.

Excavation work was carried out beneath the buildings near the Potomac River. Water was seeping in. The ground was unstable. The excavation was “complicated and costly,” the inspector writes.

Roof Gardens

The push began in the summer of 2025. In July, Russell Vought wrote to Powell. He oversees the White House budget. He took aim at the decor. His letter targeted “rooftop terraced gardens,” CBS News reported. It also targeted VIP dining rooms and “high-end” marble.

A Cost Estimate Presented

On July 24, Donald Trump visits the construction site. Powell accompanies him. Trump hands him a sheet of paper. The estimate on it is even higher. Powell objects that it includes a building that has already been renovated, according to NBC News.

That same month, Bill Pulte urged Congress to investigate Powell’s testimony. Pulte heads the federal housing finance agency. According to CBS News, he accused Powell of being “misleading.” He provided no evidence.

Subpoenas, Then a Judge

In January 2026, Powell reveals a criminal investigation. The Department of Justice is targeting his June 2025 testimony before the Senate. In a video, Powell describes this as “threats” and “pressure” from the administration.

A federal judge then ruled on the matter. He struck down the grand jury subpoenas. CBS News reports that he viewed them as a pretext. According to the ruling, they were intended to pressure Powell into lowering interest rates or resigning. The prosecution had produced “virtually no evidence” of a crime, NBC News reports.

On April 24, the Washington, D.C., U.S. Attorney’s Office closed the investigation. It handed the matter over to the inspector general. The way was cleared for Kevin Warsh.

The evidence never matched the motive.

No Crime Found

Michael Horowitz’s report was released on Wednesday. The Fed’s inspector general dated it September 29. Powell had requested it in July 2025.

The construction budget has more than doubled. It stood at $921 million in February 2020. By December 2024, it had reached $2.018 billion.

The total project budget amounts to $2.381 billion. The completion date has been pushed back from the second quarter of 2024 to December 2027.

The inspector general’s team found no reasonable basis to believe a federal crime had been committed. It found no administrative misconduct.

Later on Wednesday, Trump named a culprit on Truth Social. “It’s Jerome Powell’s fault.” He wants Powell to be “forced to resign, IMMEDIATELY.” He wants the government to prosecute him, failing that, “for corruption or incompetence.” He wants Attorney General Todd Blanche to review the report and make a decision.

I judge this case based on three criteria. The price must be set before the expenditure. There must be genuine competition. An accusation must be supported by evidence.

My side is the one that sets the price before signing. Powell’s counsel signed first. Trump is demanding a trial. The report recommends a cap.

There’s no crime. No price cap either.

Mismanagement

On the issue of management, the White House is correct.

On Wednesday, according to CNN, White House spokesperson Kush Desai spoke of “blatant mismanagement.” The report documents it.

The inspector concludes that the board did not manage its contract effectively. It deviated “on numerous occasions” from its cost-control provisions.

These failures were not unprecedented. The renovation of the Martin Building took eleven years. Its cost more than doubled, rising from $203 million to $454 million between 2012 and 2022.

The inspector had analyzed the project in five reports. The council had addressed all eleven of his recommendations. Yet several flaws persist. The first: a cost cap that was never truly enforced.

The lesson was clear. The council repeated several of the same mistakes.

A $1.5 million contract

The board had, however, chosen a protective approach. The general contractor is involved from the design phase onward. The contractor then commits to a guaranteed maximum price. Beyond that, any cost overruns are the contractor’s responsibility, with some exceptions.

The board did not hire its contractor until March 2022. That was late. Two design phases had already been completed. Construction began in July.

The request for proposals did not require any overall estimate. The contract was awarded for $1.5 million in preliminary services. Amendments followed. The contract is now worth over 2 billion.

This contract required three detailed cost estimates as the plans progressed. The board did not request any of these estimates. None were provided. The contractor’s first overall estimate arrived with its January proposal. Work had been underway for three and a half years.

A cost cap did exist—on paper. The project team had set it at 857 million. They communicated this to the architect in April 2020. They never updated it. Neither the contractor nor the council representative was informed of it.

Eighty-four lots

There was no lump-sum price. The council divided the project into lots. The contractor put 84 limited-scope lots out to bid. By December 2025, the council had awarded 69 of them. They totaled $1.978 billion.

Without a maximum price, the contractor bears no significant risk. Without a maximum price, its 2.95% fee increases as expenses rise. Without a maximum price, the contract becomes a cost reimbursement with a markup, according to the inspector. Without a maximum price, the final price is revealed only at the end. The risk remained with the board. My first criterion was no longer met as early as 2022.

The board believed it was protected

The board disputes this. According to its officials, each awarded lot transferred its risks to the contractor. They view this as the equivalent of a guaranteed price. The inspector rules: “We did not find this to be the case.”

A guaranteed price is negotiated when the plans are nearly complete, the report notes. It is not established on a lot-by-lot basis. In this case, the lots were spread out over four years.

Two out of seven bids

The Fed updated its frequently asked questions on September 30. It attributes the increase to revised plans following consultation with review agencies, followed by the cost of materials and labor. Finally, it cites an excess of asbestos, contaminated soil, and a higher-than-expected water table.

In interviews, its executives primarily cited inflation, the inspector notes. He acknowledges that inflation played a role.

From March 2022 to October 2023, new construction costs rose by approximately 16 percent. The inspector derives this figure from the producer price index.

The two contracts for mechanical, electrical, and plumbing work on the building’s structural framework, originally estimated at 178 million, were awarded for 539 million.

The price tripled.

Seven bidders, two bids

The contractor had solicited seven bidders for each lot. Two bids were received for the first lot. Two bids were received for the second. The contract required three bids, unless there was a justified shortage. My second criterion is met.

In 2025, two more lots of the same type followed. The four lots total 694 million. That’s nearly 500 million more than the architect had anticipated. Three of the four lots had not received three bids.

The team did not request a second opinion from its representative. They explained that they wanted to “keep the project moving forward.” I consider this decision to be at the heart of the failure.

The schedule took precedence over the price.

A lawn on top of a garage

That left the luxury feature that had been criticized in 2025. The inspector examined it element by element. The marble did not significantly contribute to the cost increase. Neither did the fountains. Nor did the garden terrace.

On the plans, the “garden terrace” is part of the south lawn from 1951. It covers the new garage. Small original planters once held herbs there.

According to the project team, the green roofs cost $615,000. The fountains account for $3.4 million in the contractor’s proposal.

Beehives on Other Roofs

The report even specifies that the beehives were not included in the plan. There were two of them. They were located on the roofs of the Martin and New York Avenue buildings.

In June 2025, the council removed four planned fountains. An official cited fears of criticism. The budget will be tight, he acknowledged. The space will have to be redesigned.

The critical discrepancies lay elsewhere. They involved the ducts and pipes.

The plants received the scrutiny that the pipes deserved.

On Track, Quarter After Quarter

The dashboards were reassuring. Quarter after quarter, the project was “on track.”

The benchmark kept shifting. Every revised budget became the new standard. The original cost was no longer used as a measure.

The budget was only flagged as “at risk” for four consecutive quarters. That was just before the 2025 increase.

Planned allocations within the scope of the project weren’t reported to management. Even a batch that was well above the estimate didn’t need to be reported.

Senior executives trusted the facilities team. The inspector refers to oversight “based on trust.”

The board members voted on the budgets. They did not manage the construction site on a day-to-day basis. The report does not point the finger at anyone. It describes inadequate governance.

A cap, even if late

Warsh accepts the seven recommendations. He does not dispute anything. His letter never mentions Powell by name. Nor does it address the allegations of misconduct, notes Fox Business.

Warsh entrusts management of the project to the General Services Administration (GSA). The GSA manages federal buildings. It will report to the board and its chairman. Its administrator, Edward Forst, promises to get the projects “back on track.”

An auditor to review payments

Warsh hires an independent auditor. The auditor will verify every cost itemized. Warsh also promises to seek reimbursement for any work that was paid for but not performed.

That leaves the guaranteed price. Warsh himself admits it’s “a late stage.”

The audit seems like a useful measure to me. It could recover money that has already been paid. The cap is coming too late. It would do little more than protect the end of the project.

What the offensive has produced

Its effects are already being felt. Pirro has kept her threat of an investigation on the table, NBC News reports. Powell has remained in his position. According to the network, this threat kept him on the board. His term as chairman had ended on May 22.

The Trump administration lost a seat to be filled on the board. The investigation also posed an obstacle for Kevin Warsh. According to CBS News, Republican Thom Tillis had been withholding his vote for Warsh until then.

On Wednesday, Pirro’s office was already reviewing the report, a spokesperson told NBC.

Remedies, No Prosecution

Mismanagement has been established. However, the report does not recommend any lawsuits. Its remedies focus on pricing, contracts, and oversight.

Based on the evidence, the attack falls flat. I see no action for taxpayers in Wednesday’s messages. They target one man. They don’t save a single dollar.

Trump is calling for a man to be held accountable when a price is missing.

One building pays for the other

In December 2024, the board allocated 510.4 million to the New York Avenue building renovation project. The cost overrun had to be covered.

This building will not be fully renovated as planned. Instead, the board is planning repairs, the project team said.

The Fed funds itself through its own revenues, Fortune explained in July 2025. The surplus, after covering its costs, goes to the Treasury. At the time, its losses had suspended these payments. Every dollar spent in excess would therefore, sooner or later, be missing from the Treasury.

Warsh’s letter refers to “public funds.”

If it were your own home, would you accept a price cap set after almost everything had already been signed?

The Federal Reserve will soon have a price cap for its headquarters. This will be its second.

The first one was never shown to the contractor.

Two billion with no cap and a single designated culprit.

Signed, Maxime Marquette, columnist

Columnist’s Transparency Box

Editorial Position

I am not a journalist, but a columnist, expert, and analyst. My expertise lies in observing and analyzing the geopolitical, economic, and strategic dynamics that shape our world. My work consists of dissecting political strategies, understanding global economic trends, contextualizing the decisions of international actors, and offering analytical perspectives on the transformations that are redefining our societies.

I do not claim to possess the cold objectivity of traditional journalism, which is limited to factual reporting. I strive for analytical clarity, rigorous interpretation, and a deep understanding of the complex issues that affect us all. My role is to make sense of the facts, place them within their historical and strategic context, and offer a critical interpretation of events.

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OPINION: Powell’s Fed has committed $2 billion with no cap, and Trump sees only one culprit