Construction on the Marriner S. Eccles Federal Reserve building in Washington, D.C.

White House advisers are ramping up a pressure campaign against Federal Reserve Chair Jerome Powell by alleging he either lied to Congress about the Fed’s headquarters renovation or grossly mismanaged it, potentially creating a new legal avenue to oust him.

The complaints have opened a new line of attack against Powell as part of a broader push for him to lower interest rates. It follows President Trump’s demands that the Fed consider federal debt-service costs when setting rates, something the institution has strongly resisted after securing its independence from the Treasury Department in 1951.

Trump told reporters Friday he wasn’t planning to remove Powell but said he was doing “a terrible job,” and added “he’s costing our country a lot of money.”

The administration formalized its latest challenge Thursday with a letter from Russell Vought, Trump’s budget director. In it, he implied Powell either made false statements to Congress about the $2.5 billion renovation of three office buildings overlooking the National Mall in Washington or failed to comply with permitting rules around capital-area construction.

Trump simultaneously stacked the federal commission that must sign off on major construction projects in the capital with three White House advisers, including James Blair, a deputy chief of staff.

On Friday, Vought told reporters that both his office and the newly installed Trump advisers at the National Capital Planning Commission are “going to be asking very, very tough questions” about Powell’s recent statements and about cost overruns that are “horrifying.”

The Wall Street Journal reported two years ago about cost overruns on the building project. The issue gained political traction in June when Sen. Tim Scott (R., S.C.) pressed Powell about the expenses, including luxury features, during a congressional hearing. Powell disputed media accounts about certain high-gloss finishes, saying they weren’t part of the latest design plan.

A Fed official said Powell was honest in his congressional testimony about the building plans. It isn’t clear whether the design changes were substantial enough to warrant new plans being filed with the planning board. The Fed’s external building manager hadn’t advised that any of the planned changes needed to be resubmitted, the Fed official said.

In an interview, Blair said he was “very keen to pry into” the Fed’s compliance with submitted building plans from his new perch on the planning commission.

The Fed’s $2.5 billion renovation project includes three office buildings overlooking the National Mall.

“If it is found out that Chair Powell did lie to Congress, I would think the Board of Governors and the American people—and the U.S. Senate—would have severe concerns about that,” he said.

The building allegations take on greater significance given Trump’s frequently expressed desire for lower rates and legal constraints on presidential power over the Fed. A recent Supreme Court order suggested Fed officials couldn’t be removed from their jobs over a policy dispute, meaning they would have to be removed “for cause,” which has generally been interpreted to mean malfeasance or dereliction of duty.

White House advisers sidestepped questions over whether the administration might use any findings to seek Powell’s dismissal. “You guys want to make it more about a metaphysical question about the independence of the Fed,” Vought said Friday.

In the interview, Blair said Trump was right about the need for Powell to cut interest rates. “I wouldn’t project what will…come of whatever we find or don’t find,” he said of the questions around the renovation project.

In his letter to Powell, Vought asked a series of questions designed to find discrepancies in Powell’s testimony or deficiencies in the Fed’s submissions to the planning authority.

President Trump nominated Jerome Powell as Fed chair in 2017 during his first term.

Fed scholars called the latest developments a transparent attempt, at best, to open up a new pressure front on the central bank and, at worst, a dangerous step toward manufacturing a legal justification for Powell’s removal.

“We are in a high-stakes moment in the history of the Federal Reserve,” said Peter Conti-Brown, a Fed scholar at the University of Pennsylvania. “It seems clear to me that the Trump administration, using various mechanisms, [has] now cooked up a post-hoc explanation for Powell’s removal.”

Investors have taken note because firing a Fed chair for political reasons would shatter decades of established norms that underpin global confidence in the U.S. dollar. “If President Trump and his allies launch this assault on the Fed, they will introduce profound instability into virtually every aspect of the global economy,” Conti-Brown said.

The effort echoes a similar pressure campaign by President Richard Nixon in 1972, when his administration planted false stories about Fed Chair Arthur Burns seeking a pay raise while pushing unpopular economic policies—a tactic aimed at undermining the central bank’s credibility.

The building brouhaha has emboldened a faction within the Trump administration that has long wanted to challenge Fed independence.

Some economic advisers such as Treasury Secretary Scott Bessent have generally advocated for preserving Fed independence. For example, Bessent declined to criticize Powell over the renovation in a recent Fox Business interview.

But other advisers and outside allies have been exploring legal avenues for Powell’s removal since before the election.

The renovation’s ballooning costs reflect a familiar pattern in Washington construction. Like many federal projects constrained by the capital’s height or other aesthetic restrictions, the Fed had to build expensive underground space instead of adding floors. Congress’s Capitol Visitor Center faced similar constraints and saw costs explode from an initial $71 million estimate to more than $600 million when it opened in 2008.

The Fed’s project, which its board approved in 2017, involves retrofitting two historic buildings on Constitution Avenue alongside the National Mall. It completed the refurbishment of a third adjacent building in 2021.

“No one in office wants to do a major renovation of a historic building during their term in office, let alone two historic buildings that needed a lot of work,” Powell said during testimony last month.

The building pressure follows Trump’s broader push for lower interest rates to reduce government borrowing costs—what economists call “fiscal dominance,” where the central bank gives priority to the Treasury’s financing needs over fighting inflation.

‘No one in office wants to do a major renovation of a historic building during their term in office, let alone two historic buildings that needed a lot of work,’ Fed Chair Jerome Powell said last month.

The Fed isn’t expected to cut at its meeting later this month, but Powell has signaled a reduction is possible later this year if inflation is well behaved or the labor market weakens.

Trump wants cheaper debt service on the federal deficit, which his tax cuts could enlarge. But central banks in advanced economies resist such pressure outside of extreme circumstances such as war. They view inflation stability as crucial to maintaining confidence in the nation’s currency.