Jerome Powell has been cleared of any criminal wrongdoing over the Federal Reserve’s $2.5 billion “Palace of Versailles” headquarters debacle, but it raises questions about his overall performance as the leader of the nation’s central bank.
While I wouldn’t call Powell’s more than eight-year stint as Fed chair legally criminal, it certainly hasn’t been a successful run. It’s actually cost Americans quite a bit and continues to do so.
It’s unfortunate that the public focus shifted to the unfounded accusation of him misleading Congress regarding budget overruns for the Fed headquarters renovation—an issue, fueled by former President Trump’s disdain for Powell’s reluctance to lower interest rates. In my opinion, Powell should have been removed for sheer incompetence.
Now, I’m not taking sides in the ongoing drama surrounding Trump’s attempts to fire Powell while fixating on the less significant short-term interest rates (what really matters is the rate on the 10-year Treasury, which influences consumer borrowing and is influenced by market forces).
This confrontation stands as one of the few positive aspects of Powell’s tenure; he recognized that lowering the Fed Funds rate while the economy thrived would undermine confidence in the Fed, exacerbate persistent inflation, and worsen the effects of Trump’s tariffs and the situation with Iran.
However, that recognition does not absolve him from being an ineffective Fed chair, regardless of his costly new office or his poor track record in managing inflation.
Reading about his official clearance from criminal accusations only highlights his lack of capability. Just because he isn’t guilty of a crime doesn’t change the fact that he can’t effectively manage a reconstruction project, let alone lead the world’s most significant central bank.
A shoutout to James Franey from The Post for initiating the controversy. Back in April 2025, he revealed that the estimated cost of the headquarters renovation had skyrocketed from around $1.9 billion in 2021 to an anticipated $2.5 billion by its projected completion in 2027.
The Fed isn’t the only agency in Washington facing cost overruns, but it is the nation’s central bank. Those in charge are expected to inspire confidence in the stability of the U.S. dollar, which remains the global reserve currency. They oversee the money supply and a $32 trillion economy, so it’s essential they know how to handle finances.
Even more concerning is how they are spending these funds. As Franey pointed out, central bank officials were looking at luxury features like rooftop garden terraces, skylights, elaborate water features, and a new elevator system designed to drop board members directly into their upscale dining suites.
Whatever happened to government employees just working from cubicles?
As I’ve already mentioned, the whole situation was not criminal, as Trump tried to suggest in his efforts to remove Powell, and as confirmed by the Fed’s inspector general last week. Cost overruns in Washington are about as predictable as springtime cherry blossoms.
But this mess indicates that Powell wasn’t fit for the role. Remember, he’s the Fed chair who seemed to take pleasure in printing money, even though his primary responsibility should be to maintain price stability.
Initial Criticism
Powell was appointed by Trump in 2018 during the president’s first term. A year later, Trump began criticizing Powell, successfully pressuring him to refrain from necessary rate hikes while the economy was thriving. When COVID struck, Powell’s response was to excessively print money, continuing long after the pandemic waned and people returned to work.
The outcome? Inflation spiked beyond what was expected, hitting more than 9% in June 2022, despite Powell’s reassurances. He ended up having to raise rates eventually. Though inflation rates fell thereafter, prices have remained high, contributing to Joe Biden’s struggles in securing a second term (not to mention his poor debate performances), while then-VP Kamala Harris faced difficulty in presenting herself as a capable steward of the economy.
How did Powell overlook the persistent nature of inflation? Perhaps it’s the same reason he missed the cost overruns on the new headquarters: he doesn’t invest enough time in what genuinely matters at the Federal Reserve. For instance, in 2022, the Fed crafted a “Diversity, Equity and Inclusion Strategic Plan” to embody the Board’s commitment to diversity and inclusion—a far cry from a solid plan to manage inflation or accurately assess the costs of extravagant features like rooftop gardens and ornate water installations in their new headquarters.
