Danger Close with Brian O'Leary

Danger Close with Brian O'Leary

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Danger Close with Brian O'Leary
Danger Close with Brian O'Leary
Friday for Effect

Friday for Effect

25 July 2025

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Brian O'Leary
Jul 26, 2025
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Danger Close with Brian O'Leary
Danger Close with Brian O'Leary
Friday for Effect
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A Building That’s Being Built

Marriner S. Eccles Federal Reserve building

We can talk another time about whether the Federal Reserve should be free to exercise its judgment with regard to monetary policy without political influence from the Executive Branch (I think it should).

Anyway, yesterday, President Trump toured the Marriner S. Eccles Building, the main headquarters of the Federal Reserve, which is undergoing a major $2.5 billion renovation.

The overhaul of both the Eccles Building and the East Building was approved by the Fed’s governing body in 2017 with the aim of modernizing the nearly century-old facilities, removing hazardous materials like lead and asbestos, improving safety and security and reducing the Fed’s dependence on rented office space.

The original projected cost at the time of its approval was approximately $1.9 billion.

Since then, labor and material costs have risen, and construction crews have encountered more asbestos, lead, toxic soil and higher groundwater levels than expected.

And, perhaps a little ironically, in early 2020, three Trump appointees to the Commission of Fine Arts (CFA) voiced their opposition to one aspect of the original design proposal, which featured a glass facade to symbolize the Fed’s institutional transparency.

At a January 2020 CFA meeting, Commissioner Justin Shubow described glass as “impermanent and fragile,” insisting the structures should appear more solid and enduring like the original buildings.

Later that year, the commission approved a plan to replace the glass with marble for the base, cornice and facade.

That modification, which wasn’t Jerome Powell’s idea, increased overall costs by about $600 million.

Yesterday, Trump was accompanied on his visit by the Fed Chairman, whom he placed in charge of the central bank in 2017 and yet has referred to him as “clueless,” “a moron,” and a “bonehead.”

Despite naming him to the position, Trump has often expressed his regret for doing so, saying things like, “I made him chairman, and he turned out to be not as good as I had hoped.”

As you may know, Trump has been pressuring Powell for some time (like, since soon after appointing him) to lower interest rates.

Nonetheless, outlooks for next week’s meeting of the Federal Open Market Committee (FOMC) point to the federal funds rate remaining in the current 4.25%-4.50% range, in spite of external political pressure, particularly from Trump.

As you may also know, while his advisors have warned against it, many believe that Trump has been looking for grounds to fire Powell before his term ends next May.

Most recently, some believe, he’s been focused on the cost overruns for the building renovations, which made yesterday’s visit to the site that much more interesting.

After acknowledging that “It’s a tough construction job,” and that “they’re building basements where they didn’t exist or expanding them and a lot of very expensive work, there’s no question about it,” Trump sort of took off the gloves.

“So, we’re taking a look,” he said. “And it looks like it’s about $3.1 billion. It went up a little bit. Or a lot.”

As the President said this, Powell began to gently shake his head in disagreement.

Trump continued, “So, the 2.7 is now 3.1.”

“I’m not aware of that,” Powell chimed in.

“Yeah, it just came out,” Trump responded smugly, pulling a folded piece of paper from his breast pocket.

“I haven’t heard that from anybody at the Fed,” the chair said before examining the document.

After at first appearing confused as to why the numbers didn’t add up, Powell recognized the discrepancy.

The total expenditures included the renovation of the Martin Building, which was completed in 2021.

“You’re including the Martin renovation,” Powell said. “You just added in a third building, is what that is.”

Trump then comically responded, “Well yeah, but it’s a building that’s being built,” as if any building currently under construction in the DC area might reasonably be included in the accounting for the Fed’s current project.

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