Allies of President Donald Trump are pressing for an investigation into the ongoing restoration of the Federal Reserve’s headquarters, costs for which have ballooned to $2.5 billion.

Any evidence of mismanagement or fraud, as White House officials have suggested, could prove a useful pretext for removing Fed Chair Jerome Powell, whose resistance to cutting interest rates this year has angered the president.

But the price tag has less to do with “ostentatious” features than the challenges of building — particularly underground — in what was once a swamp near the Tidal Basin along the Potomac River.

Foundation work for the Fed expansion was so difficult that contractors responsible for the job received a 2025 award for “excellence in the face of adversity” from the Washington Building Congress, a building trades association.

The ongoing renovation and expansion of the historic 1937 building that houses the Fed, plus an adjacent 1931 federal building, has faced setbacks, with costs for the long-overdue rehab climbing more than 30% since 2023.

Officials from the Trump administration blame wasteful spending for the cost overruns. In a July 10 letter to Powell, Office of Management and Budget Director Russell Vought described the project as an “ostentatious overhaul” featuring “rooftop terrace gardens,” “VIP dining rooms and elevators” and other luxury amenities. Federal Housing Finance Agency Director Bill Pulte, a frequent Powell critic, said he’s confident Congress will open an investigation.

Powell has defended the renovation work as transparent. He responded to Vought’s claims in a letter on July 17, explaining that the gardens are merely green roofs, for example, and the elevator is being extended to accommodate disabled users.

The project was always going to be tricky, with initial cost estimates pinned at $1.9 billion. Construction on the Marriner S. Eccles Federal Reserve Board Building and the adjacent Federal Reserve East Building involves adding new office space, removing asbestos and lead and replacing antiquated mechanical systems. Neither the Eccles Building — an austere edifice designed by Paul Cret and dedicated by Franklin D. Roosevelt — nor the East Building has ever been fully renovated since they were built nearly a century ago.

Some of the bigger cost factors for the Fed are largely invisible. The price of structural steel exploded in 2021, just before construction began. Any building project in Washington’s so-called monumental core is covered by a bevy of design oversight boards, which can, and did, slow down the work. And the renovation of structures built during the New Deal has to account for federal security standards adopted after the Sept. 11, 2001, terrorist attacks. 

The most challenging parts of the renovation, however, are underground.

Parts of the job call for deep excavation. Expanding the Fed’s campus involves converting a parking garage underneath the Eccles Building into additional office space. A five-story addition on the north side of the Fed’s East Building also boasts four extra floors below grade — a common trick in Washington, where heights are capped and historic vistas are protected. Below the south lawn of the East Building, a 318-space parking garage is being added. According to an FAQ put out by the Fed, the water table was higher underground than builders had predicted.

Building a new basement below an existing structure is a huge undertaking. Berkel and Company Contractors, a specialty foundation contractor, had to physically lower the slab on which the building stands, supporting the structure while excavating the ground beneath it. The company declined to comment, but a video posted on YouTube explains that Berkel built a bracing system above the slab in order to demolish it and lower the basement level more than 20 feet. The work required 1,000 micropiles — deep foundation steel elements used in ground conditions that don’t allow for traditional piles.

Excavating underneath historic structures is expensive work. A proposal to shore up the Smithsonian Institution’s 19th-century Castle against seismic rumbling with an expansion below ground totaled $2 billion before the plans were shelved. Building along the National Mall is tough as well. Much of the land didn’t exist a century ago.

As landscape architect Phia Sennett wrote on the website of the National Trust for Historic Preservation, the Tidal Basin and surrounding area were filled from sediment dredged from the Potomac River and built over a series of creeks. To complete the Smithsonian’s National Museum of African American History and Culture — more than 60% of which is below grade on the National Mall — architects had to design an enormous “bathtub” to keep the water table out. 

Construction costs for that building, which opened in 2016, reached $540 million, 50% more than an initial estimate. The price tag for the National September 11 Memorial and Museum, another project with daunting underground requirements and multiple stakeholders, rose to $1 billion before construction was halted in 2011. Its final costs were reported at $700 million.

In testimony before Congress in June, Powell acknowledged the project was a daunting one.

“No one in office wants to do a major renovation of a historic building during their term in office,” he said. “We decided to take it on because, honestly, when I was the administrative governor, before I became chair, I came to understand how badly the Eccles Building really needed a serious renovation. It never had one. It was not really safe and it was not waterproof.”

The Fed renovation is being performed by Fortus, a joint venture between the Dutch design consultancy Arcadis and the Washington, DC–based architecture firm Quinn Evans. Arcadis specializes in engineering and resilience, including water infrastructure. Quinn Evans has led complex restoration jobs, among them Michigan Central Station in Detroit and the National Academy of Sciences headquarters. Both firms referred a reporter from Bloomberg to the Fed, which didn’t respond to a request for comment.

Design plans for the Eccles Building changed significantly since they were first introduced. During the first Trump administration, architects at the request of the Fed proposed using more glass, but Trump appointees to the US Commission of Fine Arts asked for more white marble to align with a proposed mandate from the president requiring all new federal buildings to be classical in style. The demand to use more marble was first reported by the Associated Press.

During a 2021 review by the National Capital Planning Commission, a General Services Administration official said that the Fed had withstood a “tumultuous” oversight process. 

“They’ve been really put through their paces,” Mina Wright, founding director of the GSA’s Office of Planning and Design Quality, said at the time. “They’ve had some hostile criticism at one point that was unjustified.”