There’s a storm brewing at Constitution Avenue, and it’s not just bad economics , it’s a full-on institutional rot. That’s the big takeaway from a fiery Friday WarRoom conversation between Steve Bannon and David Malpass-former president of the World Bank, as they dug into the Federal Reserve’s massive bloat, bad models, and its role in stifling American prosperity. With President Donald Trump back in office and laser-focused on rebuilding the American economy, this conversation hit a nerve , and laid out why the Fed may be standing in his way.

First, the numbers: the Fed’s new office construction project has ballooned from an already bloated $1.8 billion to a staggering $3.1 billion. "Massive cost overrun,” Bannon called it, and Malpass agreed, saying it speaks to a deeper problem inside the Fed’s entire structure. "Central banks are part of government, so they grow just like everything else in government — inefficient and expensive,” Malpass explained.

But this isn’t just about bad budgeting. Bannon and Malpass pointed to a systemic issue , outdated economic models, bloated payrolls, and a refusal to adapt. "They’ve got 8,000 people working on these broken models,” said Bannon, referencing how interest rate policies have been based on flawed assumptions for decades. According to Malpass, these models are "wrong, and they deny it.”

And who pays for all of this?  Taxpayers do through high interest rates, weak wage growth, and a distorted economy that favors foreign production. "People are getting poorer,” Malpass warned, "and Trump’s trying to fix that.”

President Trump’s strategy, according to Malpass, is clear: stable dollar, lower interest rates, and production-based wage growth. It’s classic America First economics — rebuild domestic manufacturing, bring down inflation the right way (through supply, not handouts), and strengthen the dollar without pricing the U.S. out of global markets. Malpass praised Trump’s command of economic fundamentals: "He knows construction, he knows cost, and he knows interest rates. He’s building a future.”

One example that stuck out was Trump’s successful $250 million renovation of the Old Post Office in D.C. — now the Waldorf Astoria — compared to the Fed’s $3.1 billion boondoggle. "He rebuilt it for a fraction of the Fed’s mess,” Malpass said, proving that competent leadership can still be found — just not inside the central bank.

But here’s where it gets serious: this isn’t just about bad buildings or bad forecasts. The Fed’s entire structure may need to be ripped out and rebuilt. Malpass emphasized that "this is not just a regime change — it’s a full upheaval.” Every model, every policy, every assumption needs to be reviewed. This isn’t optional anymore.

So what’s next? Bannon asked the pointed question: Should Trump form a task force now? Malpass didn’t hesitate. Yes — and it should start immediately. The Fed’s current operation is too flawed, too bloated, and too out of touch with reality to be trusted with the future of the U.S. economy.

Bottom line: the Fed isn’t just broken — it’s actively working against President Trump’s pro-growth agenda. And if we don’t get serious about fixing it, we’re going to keep bleeding productivity, prosperity, and power.

The central bank isn’t just a money printer. It’s the battleground for America’s economic future, Malpass said.

Watch the full conversation for more insights from Malpass from Friday’s WarRoom:

DAVID MALPASS: "To Finish The Job We Need A Total Fed Overhaul”