Powell writes to the White House to defend the Federal Reserve's $25 billion renovation project.

Federal Reserve Chairman Jerome Powell defended the $2.5 billion renovation project at the Federal Reserve headquarters in a letter to the Director of the Office of Management and Budget, Russell Vought, on Thursday. Powell stated in the letter, "We are keenly aware of our responsibility to prudently manage public resources, as we carry out the duties assigned to us by the Congress on behalf of the American people." Powell's letter essentially reiterated the information about the construction project available on the Federal Reserve's website. This letter was in response to a letter sent by Vought on July 10. In the letter, Vought described the renovation as a "lavish and extensive overhaul," criticized the project's cost, and requested detailed information about the renovations within seven working days. The controversy centers on the renovation projects at the Federal Reserve's two historic buildings in Washington. President Trump, Vought, and other Trump allies have seized on the increase in project costs and Powell's recent testimony before Congress regarding the renovation project, intensifying scrutiny on Powell in recent weeks. The criticism of the construction project coincides with the continued pressure from Trump administration officials on the Federal Reserve to lower interest rates. Federal Reserve policymakers have kept rates unchanged so far this year, waiting for more information on how Trump's tariffs and other economic policies will impact inflation and the labor market. The Fed's decision to pause rate cuts has angered Trump, leading to frequent verbal attacks on Fed Chairman Powell. Trump also criticized the project in the past week, even suggesting that it was potentially a fireable offense. On Wednesday, Trump said he had no intention of firing Powell but left open the possibility when discussing the renovation project. Trump said, "I'm not firing him. I'm not firing him. I'm not firing him. But I think we really don't work it." Following a speech in New York on Thursday, Federal Reserve Board Governor Christopher Waller blamed part of the cost overrun on inflation. He stated, "This is common in all building projects that I have heard of - I mean, I'm not defending it - but it's not uncommon. And our inflation rate is much higher than when we bid in 2017. That is obviously a factor." Waller has been considered a potential candidate to succeed Powell as Federal Reserve Chairman when Powell's term ends in May next year.