Republicans challenging Powell with Fed spending and political bias

Federal Reserve Chairman Jerome Powell will return to Capitol Hill on Wednesday on the second day of his testimony. He is expected to sit in front of the Senate Banking Committee and face tough questions from Republican and Democrat senators.

The appearance follows Powell’s testimony on Tuesday before the House Financial Services Committee, where he addressed inflation, President Donald TrumpProposed tariffs and interest rate reduction prospects.

These issues are likely to be focused, but Republicans on the Senate Banking Committee are preparing to confront Powell about what is described as overexpenditure in the Federal Reserve and increased politicization within the institution.

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In a letter obtained by the Fox Project prior to the hearing, a group of Republican senators led by banking committee chair Tim Scott criticized the Fed’s planned renovations to Washington, D.C. headquarters.

“At the same time, as Americans struggle to put food on the table, the Federal Reserve has spent billions of dollars on renovations to two Washington, D.C. offices,” the letter said.

The lawmaker cited media reports describing planned upgrades as luxurious, including a rooftop garden terrace, ornate water features, a new elevator that drops board members directly in the VIP dining suite, the use of white marble, rooftop Italian beehives and a private underground art collection.

Initially, it was projected to cost $1.9 billion, but the renovation budget reportedly “swelled” by 32%, with lawmakers claiming it had a new total of $2.5 billion.

“This gorgeous renovation is taking place at a time when the Federal Reserve has not made any profits since 2022,” the lawmaker wrote, noting that the upgrades are unnecessary and not contacted.

A Federal Reserve spokesman told Fox Business that “we received a correspondent letter and a plan.”

The agency has defended renovation plans in the past as needed to comply with updated building standards and technical infrastructure needs.

Criticism of the Fed’s headquarters overhaul has sparked wider scrutiny, including Elon Musk when he was in charge of the Department of Government Efficiency (DOGE).

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“From the end of the day, this is all taxpayer money. In fact, we need to make sure the Federal Reserve is spending $2.5 billion on interior designers.” keep I called the project “eyebrow Razor” earlier this year.

Beyond spending, Republicans are also expected to be pushing closer to what Powell describes as political bias within the Fed’s regulatory agenda.

In their letter, the senator urged central banks to remain apolitical, writing that “the Federal Reserve is susceptible to political pressure in recent years.”

They pointed to the changing attitudes of institutions on climate-related financial issues, noting that they joined a network to green the financial system under President Biden to leave the group after President Trump took office.

“The Federal Reserve is assumed to be an institution that plays an important role in the functioning of government and the global economy, so it must not only be financially responsible, but also be free from politics,” the letter states.

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Powell often highlights the apolitical nature of central bank monetary policy decisions, explaining earlier this year the Fed is “strictly apolitical.”

Powell is scheduled to begin testimony before the Senate Banking Committee at 10am on Wednesday.