“Fed Remodel Keeps Inflating” by Andrew Ackerman and Nick Timiraos (Wall Street Journal, March 6, 2023, p. A1) reports that the cost of renovating the Federal Reserve System’s Great Depression-era headquarters building now stands at $2.5 billion. Beset by runups in the costs of building materials, predictable construction delays, and design changes demanded of architects along the way, the final price tag likely will be much higher.
The Fed is not an ordinary buyer of renovation and remodeling services. Because of its unique funding mechanism, Fed officials have weaker incentives to control costs than any other governmental bureau. Its annual budget
