US President Donald Trump has the authority to fire Federal Reserve Chairman Jerome Powell for good reason if there is evidence to support it, White House economic adviser Kevin Hassett said Sunday, and that the Fed "should be held fully accountable" for the cost overruns at its Washington headquarters.

Hassett told ABC's "This Week" that Trump's decision to try to fire Powell over what the Trump administration calls a $700 million cost overrun "will depend largely on the answers we get to the questions Russ Vought has asked the Fed."

Vought, the White House budget director, last week criticized Powell for the "massive overhaul" of Fed buildings and his responses to a series of questions about the $2.5 billion project. In a post on X, he compared the project to the Palace of Versailles in France, with its rooftop gardens, water features, and "premium marble." Hassett's comments confirm that the Trump administration is actively investigating the renovation costs and Powell's testimony about the project as a possible way to oust the Fed chief long before his term ends in May 2026.

Trump has repeatedly called for Powell's resignation for failing to lower interest rates since his return to office in January. Vice President J.D. Vance offered further criticism in a post on X on Sunday: "The Fed was completely caught off guard. As President Trump said, they are LATE—both in fighting inflation during the Biden administration and in lowering interest rates now."

Roof Terrace No, Asbestos Yes

The Fed on Friday appeared to dispute some of Vought's claims in a "Frequently Asked Questions" post, opens a new tab, about the project, which described it as the first complete renovation of the buildings since they were built in the 1930s, including the removal of lead contamination and more asbestos than previously thought.

The document showed images of leaking pipes and roofs and noted that costs had risen due to rising costs of materials, equipment, and labor. The documents dispute claims that a VIP dining room or elevators are being installed. The project will have a "green roof" that uses plants to help manage runoff and aid heating and cooling, as many other federal buildings have used for decades, opens new tab, but no terrace access.

"There are no new water features, no beehives, and no rooftop gardens," Powell told U.S. senators in his June testimony, denying overspending on the project.

Powell said the nearly 90-year-old headquarters is "not perfectly safe, and it's not waterproof," while acknowledging cost overruns.

The Fed has said the project, which includes upgrading an adjacent building, will consolidate staff into one campus and reduce off-site rental costs. By February, a Fed Inspector General report on the new tabernacle estimated that costs had risen to $2.4 billion from an estimated $1.9 billion two years earlier, a $500 million increase. (alg)

Source: Reuters