Fed watchdog finds no evidence of criminal misconduct by Powell

The Federal Reserve's watchdog found no reasonable grounds to believe that Jerome Powell had violated federal criminal law in connection with the central bank's headquarters renovation. Its 120-page report also found no administrative misconduct. President Donald Trump had spent months accusing the Fed of waste over the renovation and pushing for a criminal investigation into Powell's testimony about it. The project's budget rose from $1.317 billion in 2020 to $2.381 billion by December 2024. Construction costs rose from $921 million to $2.018 billion over the same period. The watchdog identified years of weak project management, design changes and poor cost controls inside the Fed. The Fed chose a contract designed to cap construction costs but never set the cap. By July 2026, four years into construction, the project had no guaranteed maximum price despite awards for more than $2 billion of work. A switch from open-plan to closed offices delayed the design by 21 months. Completion slipped from an original expectation of 2024 to December 2027. The watchdog found that marble, fountains and a garden terrace were largely in the original design and did not materially drive later cost increases. The Department of Justice opened an investigation in January into Powell's 2025 Senate testimony. A federal judge later quashed subpoenas in the investigation, citing "essentially zero evidence" of a crime. Prosecutors dropped the investigation in April. Powell said in April that he would remain on the Fed board until the investigation was over "with transparency and finality". Whether Powell will remain until his governor term expires in January 2028 is unresolved.