The Fed-Trump feud: What you need to know

Subscribe to enjoy similar stories. The Justice Department’s investigation of Federal Reserve Chair Jerome Powell represents an escalation of an unprecedented White House campaign to shape what happens at the central bank. The investigation is centered on testimony Powell gave to Congress last summer, when he defended the Fed’s expensive efforts to renovate its headquarters in Washington.

The inquiry is also the latest move in an increasingly aggressive attempt by the Trump administration to exert control over how the Fed operates and makes policy—an arena where for decades the Fed has jealously guarded its independence. Here is what you need to know about the conflict and what it could mean for the Fed’s future. Powell said Sunday that the Fed received subpoenas about testimony he gave to the Senate Banking Committee in June, related to how he answered questions about the Fed’s headquarters renovation project.

The Fed’s headquarters comprise a cluster of buildings near the west end of the National Mall in Washington. The main structure dates to the 1930s, and the Fed approved plans to renovate the facilities almost a decade ago. Costs have ballooned, with the price tag rising to as much $2.5 billion, up from an estimated $1.9 billion in 2019.

President Trump and his allies have seized on the project’s duration and expense to argue Powell has managed the central bank poorly. Powell in June defended the renovation project in response to questions from Republican members of the Senate Banking Committee, which suggested the Fed was wasting money on indulgent features such as a VIP elevator and rooftop gardens. In his testimony, Powell said that such descriptions of the work were mischaracterized.