Tariffs and Inflation Drive Up Costs of Federal Reserve Headquarters Renovation

On Thursday, Federal Reserve personnel attributed the steep expenses of refurbishing the central bank’s headquarters to tariffs and inflationary pressures, emphasizing that many enhancements are crucial for security and preserving the building's historic architectural integrity.

This clarification came during an extensive nearly three-hour tour of the construction site, held just hours before President Trump and senior White House officials planned to visit the Fed to inspect the ongoing work. Initiated in 2022, the $2.5 billion renovation has sparked controversy surrounding Fed Chair Jerome H. Powell and provided a new avenue for criticism of his leadership.

The guided tour, offered to a select group of journalists and photographers, included detailed insights into the contractors’ efforts to install seismic reinforcements and blast-resistant windows, ensuring the complex meets heightened security standards.

Anonymous Fed staff members involved with the project noted that some proposed amenities removed from the plan were not significant cost drivers.

Among the eliminated features were seating areas on a green rooftop initially intended to be walkable, which were dropped over concerns about appearing extravagant. Additionally, fountains and planter boxes planned for an annexed building were omitted to streamline the project and avoid potential delays.

Scheduled for completion in 2027, the Fed complex remains an active construction zone, with cranes overhead and materials staged for installation. Within the boardroom, where key policy decisions are made, protective coverings shield historic murals from construction debris.