Federal Reserve blows $2.5B on ‘Palace of Versailles’ HQ despite mounting losses: ‘Congress must put its foot down’

New York Post - Apr 27th, 2025

The Federal Reserve is moving forward with a $2.5 billion renovation of its headquarters in Washington, D.C., despite significant financial losses. The project has been criticized as extravagant, with some likening the spending to that of French royalty. The renovation, initially approved in 2021, has seen costs rise by 32% from the original estimate, due in part to increased material costs. The revamp includes luxury features such as rooftop gardens and VIP dining suites. Critics, including former Fed official Andrew T. Levin, argue that the expenditure is unjustifiable given the Fed's financial state and have called for congressional oversight on its authority to spend so lavishly.

The Federal Reserve has reported significant operating losses in recent years, with a $77.5 billion loss in the previous year and $114.6 billion in 2023. These losses are attributed to interest costs surpassing earnings on bonds, especially as the Fed raised rates to combat inflation. The deferred asset, which currently stands at $178 billion, must be addressed before funds can be redirected to other federal expenditures. This situation has raised concerns among GOP members about excessive spending. The renovation might further strain relations between the Fed and Congress, especially as the project continues without direct congressional appropriation or inclusion in the federal debt ceiling.

Federal Reserve Inflation Washington D.C. Government Spending Jerome Powell Andrew T. Levin Hq Renovation Federal Losses

Story submitted by Fairstory

RATING

6.8

Fair Story

Consider it well-founded

The article provides a detailed and engaging account of the Federal Reserve's renovation project and its financial implications. It excels in timeliness and public interest by addressing a current and relevant issue. The use of vivid imagery and critical perspectives captures reader attention, although the narrative could benefit from a more balanced presentation by including responses from the Federal Reserve or supportive experts. While the factual accuracy is strong, certain financial details require further verification to enhance credibility. Overall, the article effectively informs readers about a significant fiscal issue but could improve by offering a more comprehensive and transparent view.

Accuracy

The story largely aligns with factual information regarding the Federal Reserve's renovation project, its financial situation, and criticisms it has faced. The claim of a $2.5 billion renovation project is accurate, as confirmed by multiple sources. The project's approval and cost escalation due to material price increases are also correctly reported. However, while the narrative of the Fed's financial losses and deferred asset is consistent with expert commentary, specific figures such as the $77.5 billion loss in 2024 require additional verification from primary sources. Overall, the story presents a truthful account with minor areas needing further citation.

Balance

The article presents a critical perspective on the Federal Reserve's spending, heavily quoting critics like Andrew T. Levin and Joe Grogan. While these viewpoints are valid, the article could benefit from a more balanced approach by including responses from Federal Reserve officials or other economic experts supporting the renovations. The narrative leans towards highlighting the project's extravagance and financial imprudence, potentially overshadowing any rationale or benefits the renovations might offer.

Clarity

The article is well-structured and uses clear language to convey the narrative. It effectively outlines the key issues concerning the Federal Reserve's renovation project, financial losses, and criticisms. The use of vivid imagery, such as comparing the renovations to the 'Palace of Versailles,' aids in engaging the reader. However, the clarity could be improved by organizing the information more logically, such as separating financial details from criticisms for better readability.

Source quality

The article uses credible sources, such as quotes from Andrew T. Levin, a former Federal Reserve official, and Joe Grogan, a former OMB official. These individuals provide authoritative perspectives on fiscal policy and government spending. However, the article could enhance its credibility by incorporating a broader range of sources, including official statements from the Federal Reserve or independent economic analysts, to provide a more comprehensive view.

Transparency

The article lacks transparency in some areas, particularly regarding the sources of specific financial figures and the methodology behind claims of cost increases. While it references planning documents and expert opinions, it does not provide direct links or detailed explanations of how these conclusions were reached. Greater transparency in sourcing and methodology would enhance the article's credibility and allow readers to assess the validity of the claims independently.