New Powell Move May Be Aimed at Warding Off Trump

Fed chief Jerome Powell appears to have made a move designed to ward off a new line of attack from President Trump. Axios and CNBC report that Powell has asked an independent watchdog to examine the ongoing renovation of the Fed's headquarters in Washington. The project's cost has expanded to $2.5 billion, which the president and his allies say is ridiculous. Russell Vought, head of the Office of Management and Budget, has compared the renovation to the Palace of Versailles and charged Powell with "fiscal mismanagement."

In response, Powell has asked the Fed's inspector general, Michael Horowitz, to conduct an independent review of the entire project. The key background: Trump has said he will not oust Powell from his central bank post over Powell's refusal to cut interest rates to the president's liking. However, the renovation controversy could give Trump a separate rationale to fire Powell "for cause." Over the weekend, former Fed Governor Kevin Warsh labeled the renovation's cost "outrageous" on Fox News, suggesting the central bank had "lost its way," per CNBC. Warsh is considered a possible candidate to replace Powell when his term ends in 2026.