QI Research CEO and chief strategist Danielle DiMartino Booth discusses whether Fed Chair Jerome Powell is out of touch with the U.S. economy on ‘Making Money.’
Federal Reserve Chairman Jerome Powell returns to Capitol Hill on Wednesday for the second of two days of testimony. He will sit before the Senate Banking Committee, where he’s expected to face tough questions from Republican and Democratic senators.
The appearance follows Powell’s testimony Tuesday before the House Financial Services Committee, where he addressed inflation, President Donald Trump’s proposed tariffs, and the outlook for interest rate cuts.
While those issues are likely to remain in focus, Republican members of the Senate Banking Committee are also preparing to confront Powell about what they describe as excessive spending at the Federal Reserve and growing politicization within the agency.
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In a letter obtained by FOX Business ahead of the hearing, a group of Republican senators led by Banking Committee Chairman Tim Scott, R-S.C., criticized the Fed’s planned renovations to its Washington, D.C. headquarters.
Senator Tim Scott, a Republican from South Carolina and chairman of Senate Banking, Housing, and Urban Affairs Committee, during a confirmation hearing in Washington, D.C., on Thursday, Feb. 27, 2025. (Al Drago/Bloomberg via Getty Images / Getty Images)
“At the same time Americans are struggling to put food on the table, the Federal Reserve has been spending billions of dollars on the renovation of two of its offices in Washington, D.C.,” the letter states.
The lawmakers cited media reports describing the planned upgrades as extravagant, including, “rooftop garden terraces, ornate water features, new elevators that drop board members off directly in their VIP dining suite, use of white marble, rooftop Italian beehives, and a private art collection in the basement.”
Initially projected to cost $1.9 billion, the renovation budget has reportedly “ballooned” by 32%, bringing the new total to $2.5 billion, the lawmakers allege.
“This lavish renovation is being done at a time when the Federal Reserve has not made a profit since 2022,” the lawmakers wrote, calling the upgrades unnecessary and out of touch.
The Marriner S. Eccles Federal Reserve building in Washington, DC, US, on Tuesday, June 25, 2024. (Ting Shen/Bloomberg via Getty Images / Getty Images)
A Federal Reserve spokesperson told FOX Business, “We have received the letter and plan to respond.”
The agency defended the renovation plans in the past as necessary to comply with updated building codes and technology infrastructure needs.
Criticism of the Fed’s headquarters overhaul has drawn broader scrutiny, including from Elon Musk when he was in charge of the Department of Government Efficiency (DOGE).
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“Since at the end of the day, this is all taxpayer money… we should definitely look to see if indeed the Federal Reserve is spending $2.5 billion on their interior designer,” Musk quipped to reporters earlier this year, calling the project “an eyebrow raiser.”
Beyond spending, Republicans are also expected to press Powell on what they describe as political bias within the Fed’s regulatory agenda, a concern they raised during Powell’s last visit to the committee in February.
Federal Reserve Board Chairman Jerome Powell holds a news conference following a Federal Open Market Committee meeting on June 18, 2025 in Washington, DC (Win McNamee/Getty Images / Getty Images)
In their letter, senators urged the central bank to remain apolitical, writing, “The Federal Reserve in recent years has been susceptible to political pressure.”
They pointed to the agency’s shifting stance on climate-related financial issues, noting that it joined the Network for Greening the Financial System under President Biden, only to exit the group after President Trump returned to office.
“The Federal Reserve is supposed to be an agency that plays a critical role in the function of our government and the global economy and therefore must be not only fiscally responsible but also free from politics,” the letter states.
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Powell has often stressed the non-political nature of the central bank’s monetary policy decisions, explaining earlier this year that the Fed is “strictly non-political.”
Powell is scheduled to begin his testimony before the Senate Banking Committee at 10 a.m. ET on Wednesday.