Fed watchdog finds renovation failures but no criminal referral

The Federal Reserve’s inspector general said management and oversight failures helped drive large cost overruns in the central bank’s headquarters renovation, but it found no basis for a criminal referral to the Justice Department. The report, released Wednesday, said the project’s costs rose sharply from an estimated $1.3 billion in 2020 to $2.4 billion by August 2026, with construction expenses climbing by $960 million. The watchdog said the Fed struggled with design changes, did not enforce a guaranteed maximum price, and used a process that failed to quickly escalate rising costs to senior leaders. President Donald Trump used the report to renew his criticism of former Fed Chair Jerome Powell, saying Powell should resign from the Board of Governors. Powell has denied wrongdoing, and the report did not find evidence of criminal misconduct related to the renovation or his congressional testimony.