Unboxing the Theater Around Powell’s Perjury Probe
For background on the Federal Reserve and monetary policy, see my earlier pieces: Fed Manipulation for Dummies and How the Banking System Works — and Why the Fed Matters More Than You Think.
The recent controversy surrounding the renovation of the Federal Reserve’s Washington, D.C., headquarters has taken on a significance far beyond the project itself. The price tag is large, the project is complex, and congressional questioning of Federal Reserve Chair Jerome Powell has been unusually pointed. But as of January 11, 2026, this moved from political theater to legal reality: U.S. Attorney Jeanine Pirro’s office served the Federal Reserve with grand jury subpoenas. The investigation centers on whether Powell committed perjury during his June 2025 testimony.
To understand what is actually happening, it is important to separate the facts of the renovation from the broader institutional context in which this dispute is unfolding.
Three Facts Worth Mentioning
Start with a basic clarification: the renovation has nothing to do with the core purpose of the Federal Reserve chair’s job. The Fed exists to conduct monetary policy, maintain financial stability, and supervise the banking system. Interest rates, inflation, employment, and systemic risk are the substance of that role. A facilities renovation, however costly or controversial, is peripheral to that mission.
Second, Jerome Powell is an economist and institutional leader, not a building project manager. Expecting him to have command of construction details—HVAC systems, soil contamination, cost breakdowns by trade—is like expecting a hospital CEO to explain a surgeon’s technique. Leaders of complex organizations rely on professional staff and outside experts to execute highly technical work. Not being expert on everything that you supervise is not incompetence; it is how institutions function.
A third fact comes up frequently in this discussion, so it’s worth understanding even though it’s not as relevant as defenders suggest: the renovation is not funded through congressional appropriations. The Federal Reserve funds its operations independently through earnings on its balance sheet, and renovation costs reduce the amount the Fed remits to the Treasury. This distinction matters for oversight purposes—Congress didn’t authorize this spending through the normal budget process. But make no mistake: reduced remittances mean less federal revenue, which affects the federal budget. Taxpayers are not off the hook simply because the money wasn’t appropriated by Congress.
Why the Testimony Stood Out
These facts help explain why the recent congressional testimony stood out. Instead of focusing on monetary policy or financial stability, Powell was pressed on detailed construction and design questions—matters far outside his professional training and far removed from the central bank’s primary responsibilities.
In congressional hearings, witnesses are not given questions in advance. They prepare based on what they reasonably expect to be asked. A Federal Reserve chair prepares for questions about interest rates, inflation, employment, and financial regulation—not HVAC systems and soil contamination. Powell had no reason to arrive with granular construction details at his fingertips.
In such circumstances, it is common for witnesses to submit technical answers in writing with the assistance of staff who possess direct expertise. Instead, Powell attempted to respond at a high level based on briefings, a choice that has since become the basis for claims that he was evasive or even dishonest.
The Institutional Context
This is where institutional context matters.
Trump has looked for cause to fire Powell throughout this administration.
Trump wants the Fed to lower short-term interest rates. Lower rates can stimulate the economy—at the cost of higher inflation and more debt. Trump wants economic growth prioritized and hence short-term interest rates lowered. But it’s not his decision; it’s the Fed’s. That has been a source of constant frustration for him (and past Presidents wanted the same, though never with such vocal and personal attacks on the Fed chairman).
Under the law, a Federal Reserve chair cannot be removed for policy disagreements. Removal requires cause, such as demonstrable incompetence, misconduct, or knowingly misleading Congress. If it could be shown that the chair was materially incompetent in his duties, or that he intentionally provided false testimony, serious consequences would be justified. That standard exists for a reason.
But disagreement over how to characterize a complex renovation project—or imprecision in answering technical questions outside one’s expertise—is not the same thing as lying. Reliance on staff and contractors is not evidence of incompetence.
The Structure Creates Vulnerability
This dynamic also explains why the controversy has escalated the way it has. When a leader is questioned extensively on matters unrelated to his core role and managed by specialists rather than personally, the exercise can begin to look less like an effort to inform the public and more like a test of the individual. Answers that are necessarily general can be portrayed as evasive. Answers that are imperfect can later be reframed as misleading. The structure itself creates vulnerability.
For those who remember the TV show Perry Mason (I am the cranky OLD guy after all), this is the courtroom equivalent of “Objection, your honor—Mr. Mason is leading the witness.”
The questions were not designed to elicit information; they were designed to elicit answers that could later be reframed as misstatements. When you ask an economist about HVAC systems and soil contamination, you are not seeking expertise. You are creating a record.
Powell’s real mistake—though not a crime in any legal sense—was failing to recognize what was happening. He could have deferred answers, requested to respond in writing, or simply acknowledged the limits of his direct knowledge. Instead, he answered in good faith, doing what executives typically do when asked about operational details outside their wheelhouse. He assumed he was participating in an oversight hearing, not walking into a legal minefield. The questions were not seeking information; they were building a record. By the time the purpose became clear, the record was already made.
What Would the Motive Be?
Step back and consider what is actually being alleged. The claim is that Jerome Powell—a man responsible for steering monetary policy for the world’s largest economy, managing financial stability, and navigating politically charged decisions about interest rates—chose to lie to Congress about a building renovation. Not about inflation targets. Not about bank supervision. A construction project.
It borders on ludicrous. Powell has no personal stake in the renovation’s cost or timeline. He gains nothing from misrepresenting it. The idea that he would risk his reputation, his position, and potential criminal liability to obscure details about a facilities upgrade defies basic logic.
The facts support this. The Marriner S. Eccles Building dates to 1937; the adjacent Constitution Avenue Building to 1932. Neither has ever undergone a full renovation. The work includes hazardous material abatement, seismic upgrades, and underground construction in geologically challenging soil near the Potomac. Cost overruns on projects of this scale and complexity are the norm, not the exception—driven here by a 35% increase in labor and materials costs, toxic soil discovery, and D.C. height restrictions that forced expensive underground construction. And critically, a 2021 Inspector General audit found no evidence of fraud or waste, though it recommended improvements in project documentation. If there were evidence of mismanagement or deception, that is where it would surface.
The specific allegations also collapse under scrutiny. OMB Director Russell Vought claimed the renovation included “ostentatious” luxuries like VIP dining rooms and special elevators. The reality: existing historic conference rooms where meals have long been served are being modernized, and elevators are being upgraded for ADA compliance—not added as new luxuries. The “rooftop gardens” cited as evidence of excess? Those are green roofs required by D.C. environmental codes for stormwater management, standard in federal construction.
When evaluating whether someone lied, motive and plausibility count. And here, there is no motive, no personal gain, and no finding of wrongdoing—only the appearance of imprecision from a man answering questions outside his expertise in real time.
Let’s just say that what goes on in congressional hearings is often only ostensibly for transparency and information.
The Boy Who Cried Wolf
There is also the question of context—specifically, who is driving this narrative and why.
President Trump has been publicly attacking Powell and other Federal Reserve officials constantly, and the reason is no secret: he wants lower interest rates. He has said so repeatedly, loudly, and without regard for the Fed’s institutional independence.
This pressure campaign has been constant, and it has been accompanied by the president’s well-documented relationship with the truth. Exaggeration, distortion, and outright fabrication are not occasional lapses; they are the baseline.
Powell himself has now said the quiet part out loud. In a video statement responding to the subpoenas, he called them a “pretext” for his refusal to follow the president’s demands for lower interest rates. That is an extraordinary statement from a sitting Federal Reserve chair—not institutional hedging, not diplomatic ambiguity, but a direct accusation that the Justice Department is being used as a political weapon.
Consider the timeline. In July 2025, Trump personally toured the renovation site with Powell. If the project were the wasteful boondoggle he now claims, he saw it firsthand—months before the Justice Department issued subpoenas. The timing suggests this is not about accountability discovered; it is about leverage manufactured.
So when this administration, through the Justice Department or otherwise, suddenly takes an interest in whether Jerome Powell misled Congress about a building renovation, the public is entitled to skepticism. Perhaps this time the concern is genuine. Perhaps the inquiry is entirely independent and untainted by political motivation. But the president has cried wolf so many times, on so many subjects, that his credibility is spent. Whether he directed this, encouraged it with a nod, or simply created the environment in which it could happen, the pattern speaks for itself.
When someone lies almost continuously, they lose the benefit of the doubt—even on the occasions when they might be telling the truth. That is the moral of the fable, and it applies here.
What Standards Should Apply
The public deserves scrutiny of powerful institutions, and Congress has every right to ask hard questions. But accountability works best when responsibility is matched to role, expertise, and relevance. When those lines blur, oversight can start to resemble something else—and that perception alone carries consequences.
Readers should keep that framework in mind as this story continues. The most important question is not whether a renovation was expensive, but what standards we apply when judging leaders of independent institutions—and what happens when those standards drift.