Jerome Powell was cleared of criminal wrongdoing in the Fed’s $2.5 billion “Palace of Versailles” headquarters fiasco — but what about the rest of his screwups as head of the nation’s central bank?
I’m not saying that Powell’s dismal, eight-plus year tenure as Fed chair was criminal in a legal sense, but it was hardly one of success. In fact, it has cost the American people dearly and still does.
It’s a shame all of that was overshadowed by the faux charge over whether he lied to Congress about the cost overruns for the Fed’s HQ renovation, propelled by President Trump’s often irrational disdain for Powell refusing to cut rates. IMHO, Powell should have been ousted for incompetence, plain and simple.
Again, I’m not taking Trump’s side in the long-running soap opera to fire Powell while the president obsessed about less significant lower short-term rates (it’s the rate on the 10-year Treasury that pegs consumer borrowing that counts and is controlled by the markets).
That showdown was one of the few bright spots of Powell’s tenure as chair: Even he knew that cutting Fed Funds when the economy was booming would upend confidence in the Fed, stoke already sticky inflation and worsen the price impact of Trump’s tariffs and the Iran conflict.
But that doesn’t come close to exempting Powell from being a bad Fed chair, whether it’s over his opulent new office space or his poor record fighting inflation.
If you read about his official exoneration from criminal liability over the BS that he lied to Congress, it only underscores his ineptitude. Don’t let his exculpation from actual crime detract from the fact that this guy can’t handle a simple reconstruction effort, much less heading the most important central bank in the world.
Kudos to my colleague, The Post’s James Franey, for breaking the story that started the entire controversy. Back in April 2025, he reported that the HQ redo was initially estimated to cost around $1.9 billion when it was first envisioned back in 2021 but was expected to balloon upwards to $2.5 billion by the time it’s finished in 2027.
Know how to add
The Fed wouldn’t be the first agency in DC guilty of serious cost overruns. But it is the nation’s central bank. The folks running it are supposed to give confidence to the world that the US dollar is stable and should remain the reserve currency. They control the money supply and a $32 trillion economy, so they should know how to add.
Worse is what they spent this money on. As Franey reported, central bankers were eyeing amenities that include “rooftop garden terraces, skylights, ornate water features and a new elevator system that allows board members to be dropped off directly in their VIP dining suite.”
What ever happened to government workers doing their jobs from cubicles?
As I mentioned, the entire mess was never criminal as Trump tried to argue in his attempts to get Powell out of the way, and as the Fed’s inspector general last week confirmed. Cost overruns are as reliable in DC as cherry blossoms in springtime.
But it was a tell that Powell wasn’t up for the job. Recall, this is a Fed chair who seemed to relish in printing money when his job No. 1 is price stability.
Initial criticism
Powell was appointed by Trump in 2018 during the president’s first term in 2018. A year later, Trump launched an initial round of Powell bashing that was actually successful, getting him to back off necessary rate hikes while the economy was humming. When COVID shut down the economy, Powell’s response was to print money ad nauseam. He didn’t stop until way after the pandemic ebbed and people were largely back at work.
The result: inflation that was far from transitory, peaking above 9% in June 2022 despite Powell’s public statements, forcing him to eventually raise rates. The rate of inflation soon fell, but prices remained elevated (even today), a key reason why Joe Biden had little shot at re-election (aside from his dismal debate performance), and then-VP Kamala Harris couldn’t make the case she was a suitable steward of the economy.
How did Powell miss the nontransitory nature of inflation? Maybe it’s the same reason he missed the cost overruns happening at this new HQ: He doesn’t spend enough time on what really matters at the Federal Reserve. Case in point: In 2022, the Fed developed a “Diversity, Equity and Inclusion Strategic Plan” to reflect the Federal Reserve Board’s “strategic initiative on diversity, equity and inclusion, which is a shared responsibility of all Board employees.”
Not exactly a great strategy to help the Fed keep inflation in check, or figure out the true cost of rooftop garden terraces and ornate water features at its new HQ.
