WASHINGTON (AP) — Federal Reserve Chair Jerome Powell on Thursday affirmed that the agency’s renovation of two of its buildings adheres to plans approved by a local commission. This was in response to a White House suggestion that they might have broken the law by straying from those approved plans.

This letter represents the latest development in a growing conflict between the Federal Reserve, an independent body tasked with controlling inflation and striving for maximum employment, and the Trump administration. President Donald Trump has criticized Powell and the Fed for months for not reducing its key interest rate, arguing that doing so would enhance borrowing and stimulate the economy.

Powell has expressed his intent to wait and observe how the economy reacts to Trump’s extensive tariffs, which have the potential to increase inflation and decelerate growth, before taking any action.

Trump has even threatened to fire Powell, though he has since backed away and said Wednesday it was “highly unlikely” that he would take the unprecedented step of doing so. Firing the Fed chair could cause chaos in the financial markets. Several executives of Wall Street banks have said this week that the Fed’s independence from day-to-day politics is crucial.

Still, the Trump administration has seized on ballooning costs for the Fed’s renovation of two century-old buildings to argue that Powell has mismanaged the project. The president can’t fire the Fed chair because of a policy disagreement, but he could do so “for cause,” which is widely seen as some kind of malfeasance or neglect.

Last week, the president’s top budget adviser, Russell Vought, wrote Powell a letter that said Trump is “extremely troubled” by Powell’s management of the project, which has risen in cost to about $2.5 billion, up from the Fed’s initial estimate of $1.9 billion.

Vought’s letter also noted that Powell, in testimony before the Senate last month, said that the Fed removed some amenities that critics called ostentatious from its plans. Those plans had been approved by the National Capital Planning Commission in 2021.

Vought said in his letter that if the renovation plans had changed, they were no longer “in compliance with the approved plan” and may violate the National Capital Planning Act.

Powell responded Thursday that since the Fed’s plans were approved by the NCPC in September 2021, it has made only “a small number of design changes to scale back or eliminate certain elements” and added that the changes weren’t significant enough to “warrant… further review.”

“The project is proceeding in accordance with the plan that the NCPC approved,” Powell wrote.

The changes were intended “to simplify construction and reduce the likelihood of further delays and cost increases,” Powell said in his letter.

Powell also defended the cost of the renovation: “Both buildings were in need of significant structural repairs,” including “the removal of asbestos and lead contamination,” as well as the “complete replacement of antiquated systems such as electrical, plumbing, heating, ventilation and air conditioning, as well as fire detection and suppression systems,” he wrote.