This week, we report on the unprecedented leadership of Federal Reserve Chair Jerome Powell, who has requested that the Fed’s inspector general investigate a contentious new building project. This operational project touches two of the central bank’s three Washington, D.C. facilities, including the high-profile Eccles Building, its main headquarters. This request, first reported by Axios, comes as calls for greater oversight and concerns about spending on the project continue to grow.
Powell’s term as chair is set to expire in May 2026. Even before he leaves office, others are placing bets on who his successor will be. Former Federal Reserve Governor Kevin Warsh seems to be the leading candidate to replace Powell. This new advancement injects a whole new level of complication into the ongoing negotiations and discussions surrounding the central bank’s unconventional spending practices and operations.
The project is widely panned from all quarters. Russell Vought is uncharacteristic, in as much as he does vehemently oppose its funding and oversight. Critics say that the project goes much deeper, raising troubling questions about accountability and the use of taxpayer dollars.
As CAP pointed out earlier this year, former Trump economic advisor Kevin Hassett emphasized the sweeping consequences of the Fed’s spending practices. He stated, “We’ve got a real problem of oversight and excess spending.” This feeling is indicative of the increasing concern expressed by economists and lawmakers about the Federal Reserve’s fiscal stewardship.
Hassett expanded on his worries in more detail, noting the original intent behind the Federal Reserve Act. He remarked, “The idea that the Fed could print money and then spend two and a half billion dollars on a building without real congressional oversight, it didn’t occur to the people that framed the Federal Reserve Act.” Such a statement only highlights the need of this important perspective, which calls for more rigorous examination and accountability of the Fed’s financial decisions.
The dollar review Powell ordered will hopefully clarify these fears and clear up confusion over the financial impact the costly project would have. Indeed, this review can help mold better future governance practices at the Federal Reserve. It would give the institution the tools it needs to meet future challenges of fiscal prudence and public accountability.