Fed watchdog clears Powell over renovation; Trump demands he resign

The inspector general found deficiencies but no criminal violation, and the president called hours later for Powell to leave the Fed board.

Assembled by Claude from 9 sources at 9 outlets · Wednesday, September 30, 2026, Evening edition, 5:25 PM EDT · no human byline

What happened

A Federal Reserve watchdog found no criminal wrongdoing by former chair Jerome Powell in its investigation of the central bank's headquarters renovation, in a report released on Wednesday axios.com. The Office of Inspector General wrote that at no point in its evaluation did it find reasonable grounds to believe a violation of federal criminal law had occurred requiring a referral to the US Attorney General axios.com, language Reuters also quoted from the report reuters.com.

The report found deficiencies in the project without finding misconduct reuters.com, and cleared Powell after the Justice Department opened an unprecedented criminal investigation into the then-Fed chair, which became public in January axios.com. Powell remains on the Fed's Board of Governors usatoday.com.

Accounts of the project's cost differ. USA Today put the renovation at 2.5 billion dollars usatoday.com, while the Guardian described Trump criticising a 2.4 billion dollar rehabilitation theguardian.com and CNN reported the Fed now budgeting roughly 2.4 billion dollars for the work cnn.com.

Why it matters to investors

The renovation was the vehicle for pressure on monetary policy. Trump criticised the project amid attempts to push then-chair Powell into lowering interest rates theguardian.com.

That pressure did not stop with the report. Hours after it was released, Trump called for Powell to resign from his post or face legal action forbes.com, saying he should step down from the central bank's board over the renovation bloomberg.com. Trump is also trying to sack Fed Governor Lisa Cook over alleged wrongdoing in an unrelated matter reuters.com.

One structural detail limits how independent the finding looks: the Fed's inspector general is chosen by the Fed chair wsj.com. Kevin Warsh was confirmed as Fed chairman in May wsj.com, took over the top post that month cnn.com, and concurred with the review's conclusions cnn.com.

What to watch

Management of the building is changing hands. In a letter accompanying the report, Warsh said the General Services Administration will take over management of the project politico.com.

The open question is whether the campaign to remove Fed officials continues without a legal basis. The watchdog found no evidence of misconduct by the Fed in the renovation politico.com, yet the president's demand for a resignation followed within hours forbes.combloomberg.com, and a separate effort against Governor Cook is still live reuters.com. For investors, the variable is the credibility of Fed independence rather than the building itself, at a moment when the committee is debating the timing of its next rate move theguardian.comaxios.com.

Sources

1. usatoday.com: Watchdog finds no criminal misconduct in $2.5 billion Fed renovation - USA Today (2026-09-30)
2. theguardian.com: Federal Reserve watchdog finds no criminal violations for building renovation cost overruns (2026-09-30)
3. cnn.com: Powell did not break the law with expensive Fed renovations that incensed Trump, report finds - CNN (2026-09-30)
4. wsj.com: Fed Watchdog Releases Long-Awaited Audit of Building Cost Overruns - WSJ (2026-09-30)
5. axios.com: Fed watchdog clears former chair Powell in renovation probe (2026-09-30)
6. politico.com: Watchdog finds no evidence of misconduct by Fed in HQ renovation - POLITICO (2026-09-30)
7. forbes.com: Trump Says Jerome Powell Should Be 'Forced' To Resign - Forbes (2026-09-30)
8. bloomberg.com: Trump Says Powell Should Be Forced to Resign From Fed Board - Bloomberg.com (2026-09-30)
9. reuters.com: Watchdog finds deficiencies but no Fed misconduct in Powell-era renovation project (2026-09-30)