Federal Reserve says building renovation complies with law, defends costs

Source: ABC News/AP

Updated 6:38 PM EDT, July 17, 2025


WASHINGTON (AP) — Federal Reserve Chair Jerome Powell on Thursday said the agency’s renovation of two of its buildings is in compliance with plans approved by a local commission, disputing a White House suggestion that they may have violated the law by deviating from those plans.

The letter is the lastest salvo in an escalating battle between the Federal Reserve, an independent agency charged with fighting inflation and seeking maximum employment, and the Trump administration. President Donald Trump has for months criticized Powell and the Fed for not lowering its key interest rate, which the president says would boost borrowing and accelerate the economy.

Powell has said he wants to see how the economy responds to Trump’s sweeping tariffs, which could raise inflation and slow growth, before making any moves.

Trump has even threatened to fire Powell, though he has since backed away and said Wednesday it was “highly unlikely” that he would take the unprecedented step of doing so. Firing the Fed chair could cause chaos in the financial markets. Several executives of Wall Street banks have said this week that the Fed’s independence from day-to-day politics is crucial.

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