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flag A Justice Department probe into the Fed’s $2.5B headquarters renovation sparked political conflict, raising fears of interference in monetary policy.

flag Tensions escalated between the Federal Reserve and the Trump administration in late December 2025 and early January 2026 over a Justice Department inquiry into the Fed’s $2.5 billion headquarters renovation, initially projected at $1.9 billion. flag The probe, which began in November without FBI involvement, focuses on cost controls amid pandemic-related delays. flag Two emails from a political appointee raised concerns at the Fed, prompting silence that was interpreted as stonewalling. flag President Trump and some Republicans criticized the project as wasteful and politically motivated, while Fed leaders and bipartisan lawmakers warned the investigation threatens the central bank’s independence. flag Despite no formal criminal charges, the situation has fueled concerns about political interference in monetary policy. flag The Fed has retained outside legal counsel, and international central bank leaders have publicly backed Chair Powell.

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