- The Federal Reserve’s renovation project is bogged down largely by invisible labor, preservation, raw material, and environmental costs, all of which have added to the ire directed towards Fed Chair Jerome Powell.
The Federal Reserve’s long-planned renovation of its Washington, D.C. headquarters has turned into a $2.5 billion political flashpoint. Initially estimated at $1.9 billion in 2021, the cost of overhauling the Fed’s historic Marriner S. Eccles Building and its adjacent Federal Reserve East Building has jumped by over 30%, drawing fire from President Donald Trump and his allies, and raising questions about fiscal oversight at the nation’s central bank.
The project, which began planning in 2017 and broke ground in 2022, aims to bring the aging buildings into compliance with modern safety and accessibility codes and add office space while preserving their historic architecture. But that effort has come with growing pains and costs.
Renovating the Fed was never going to be an easy task. In fact, Fed Chair Jerome Powell admitted the renovations would likely stoke controversy. “No one in office wants to do a major renovation of a historic building during their term in office,” he said in June. But Powell sees the project as necessary.
According to the Fed’s information page on the project, neither the Eccles Building nor the East Building has ever been fully renovated, despite having been built nearly a century ago, with some major mechanical, electrical, and plumbing systems dating back to their construction and containing lead and asbestos.
The original budget underestimated several now-familiar forces: pandemic-era inflation, soaring construction costs, and unexpected infrastructure challenges. Prices for structural steel and other materials spiked in 2021 and 2022 as supply chains tightened and demand for large-scale projects rebounded. Labor shortages in the construction industry, namely mechanical, plumbing, and electrical trades, further drove up costs. These price inflationary factors were noted in the Fed board’s 2025 budget.
On-site, several environmental factors have also added to the renovation’s cost. Workers uncovered asbestos and several water-table issues resulting from the swampy DC soil. These complications added complexity and price costs, to excavation and foundation work—especially since strict D.C. building regulations cap building heights—forcing deeper builds underground. The difficult excavation work even earned the company working on the Fed’s foundation and underground aspects a 2025 award for “excellence in the face of adversity” from the Washington Building Congress.
These challenges are coupled by design oversight board stipulations that place aesthetic requirements to the renovations. During the first Trump administration, architects proposed using more glass in the renovations. Trump appointees to the US Commission of Fine Arts, however, required the project use more white marble to align with a proposed presidential mandate from the president that all new federal buildings be neoclassical in style. This luxury white marble comes from Georgia and has been used extensively in the construction of national landmarks including the U.S. Capitol. Aside from Georgia marble, the materials used throughout the Fed’s renovation are required to be sourced domestically.
And to match the original marble facades and detailed interiors, the Fed is required to use specialized processes more costly than those allowed in Washington buildings without historical significance or not on the National Mall.
These invisible costs are not at the core of criticism being lodged at Powell. Trump and his allies have seized on the project as evidence of wasteful spending by alleging the Fed’s building revamp of including extravagant rooftop gardens, VIP elevators, and high-end dining rooms—claims Powell and the Fed have strongly denied.
To further cut costs and justify the project, the Fed canceled renovations to a third adjacent building and clarified that most of the controversial features never existed in the first place. The so-called “gardens,” it said, are just rooftop parking areas with plantings for stormwater management. On Monday, the central bank published a virtual tour of the construction site as further proof, including clips of asbestos caulking removal and blast-resistant window installation.
Ultimately, the ballooning budget reflects the same economic challenges the Fed itself has spent the past several years trying to tame: inflation, labor shortages, and supply-chain disruption. Now, the central bank must not only manage those forces for the nation, but justify their impact on its own interests.
The Federal Reserve declined a Fortune request for comment.
