By Michael S. Derby
New York (Reuters) -Federal Reserve Chair Jerome Powell on Wednesday Pushed Back Against Reports The Central Bank Was Spending Money Excessively on Renovations, Saying That the Altost 90-Youar-Old Headquarters “Was Not Reiorly Safe,” WHILE ACKNOWLEDGING COST Overruns.
“The Media Reports … Are Misleading and Inacuratate in Many, Many Respects,” Powell Said in An Appearance Before The Senate Banking Committee.
Powell Spoke as parts of Testimony for the Central Bank’s Semi-Annual Report on Monetary Policy to Congress.
Senate Republican Tim Scott Criticized the Fed Over the Renovations, Saying at the Hearing: “During this Time of Hardship, The Fed has Spent Billions on Lavish Renovations to its DC Offices.”
Scott Cited What he said were a series of luxury upgrade, Coming at Time Where the Fed Has Been in the Unusual Position of Losing Money due to its Efforts to Contain Inflation Pressures with High short-term interest Rates.
“We can all default that updating aging infrastructure is a legitimate need, but senior citizens can barely afford formica tourbes, it Sends the Wrong Message to Spend Public Money on luxury upgrades that feel like the palace of versailles than a Public Institution, ”Scott Said.
Powell Pushed Back on the Criticism. “We do Take Seriously Our Responsibility As Stewards of the Public’s Money,” he said as he defended the Need to Upgrade The Buildings The Central Bank Counts As Headquarters for the Board of Governors. The Fed’s 12 Regional Banks Also have their own home bases.
Powell Said the Fed’s Eccles Building, Constructed Between 1935 and 1937, “Really Needed a Serious Renovation,“ Saying That Among The Building’s Issues, “It Was Not Really Safe and It Was Not Waterproof.”
He Said Reports of Huge Luxury Upgrades Were Wrong and Went On To DeTail What the Fed Was Doing to Modernize the Buildings. “There are no New Water Features, There’s No Beehives, and There’s No Roof Terrace Gardens.” The Fed is also upgrading to building nearby.
But Powell AcknowledGed That “The Cost Overruns Are What They Are.”
In A Statement on ITS Website, The Fed Said the Renovations “Will Consolidate Most Board Staff into One Campus; Reduce Off-Site Leases; and Provide A Modern, EFFICIENT WORKSPACE FOR COPY WORK ON BEHALF OF THE AMERICAN PEOPLE.”
EARLIER THIS YEAR, REPORT FROM THE FEDERAL RESERVE’S INSPECTOR General, AN IN-HOUSE WATCHDOG, SAID THAT OF FEBRARARARY THE COST OF THE RENEWS WAS EXPECTED TO STAND AT $ 2.4 BILLION, UP FROM $ 1.9 Billion Two Years Aug.
The Rise in Costs Comes As the Fed has faced notable and unprecedagem Losses due to How It Manages Monhary Policy.
The Fed is self-funded and earns Inom from Bonds it opens and services it Provides. The Fed Has Almost Always Been Profitable But has not be Been in the Last Few Years Due to High Interest Rate Costs Aimed at Setting Rates to Lower Inflation Pressures. The Fed Deals with Losses via Accounting Measures and has repeatedly Noted the Red Ink Does Not Prevents Work, But Those Losses Now Have Official Officials Targeting The System That Led To the Losses.
(Reporting by Michael S. Derby and Dan Burns; Editing by Leslie Adler)
