The Fed building renovation at the heart of Trump's efforts to oust Powell

Yearslong project to spruce up central bank buildings received little attention until recently

- Nick Timiraos & Brian Schwartz

Few people noticed when a former Federal Reserve economist published a report earlier this year about ballooning costs in the central bank's headquarters renovation. Months later, that obscure budget critique has become the centerpiece of President Trump's pressure campaign against Fed Chair Jerome Powell—and his potential attempt to remove him from office.

Trump might lack the legal authority to fire Powell for not lowering interest rates, but his advisers are seizing on the $2.5 billion building project as the next best thing: a concrete example of government waste that could erode the public trust Powell needs to function effectively.

On Wednesday, Trump said it was "highly unlikely" he would get rid of Powell, "unless he has to leave for fraud."

The White House is pointing to cost overruns and marble construction not because it has any legal authority over the central bank's buildings or budgets. Instead, administration officials are hoping to erode people's trust in Powell, build a legal case to force him out, or both.

Trump floated the idea of trying to dismiss Powell in his first term and again this spring, but he abandoned the idea both times after advisers suggested it might be a loser in the courts and with financial markets.

That has led a band of Trump loyalists to sharpen their attack by spotlighting the building project, which has been under way for years, as a possible cudgel to humiliate Powell in the hope he would resign or to attempt an ouster that a court might be willing to bless.

The laws creating the Fed say policymakers can be removed only "for cause," which has been interpreted to mean malfeasance or dereliction of duty. Legal experts doubt the administration has grounds for a court-sanctioned removal, suggesting the real strategy might be to inflict enough political damage that Powell either resigns or becomes more accommodating on interest rates.