Washington, D.C. — The head of the Federal Housing Finance Agency has called for an investigation into Federal Reserve Chair Jerome Powell over his testimony regarding a controversial $2.5 billion renovation of the Fed’s headquarters. William Pulte, who also leads both Fannie Mae and Freddie Mac, raised concerns that Powell misled Congress about the extent and expenses of the renovation, prompting speculation about potential repercussions for the Fed chair.
In comments reportedly leaked to the media, Pulte urged congressional members to scrutinize Powell’s statements and expressed that they could warrant his removal by the President. “The costs and specifics of the renovation raise questions about political bias in Powell’s testimony,” Pulte stated. He characterized the renovation plan as a “scandal” and claimed that Powell’s remarks to the Senate Banking Committee were misleading.
During his recent appearance before lawmakers, Powell rebutted claims made in various reports about the lavish features included in the renovations, alleging there were no exclusive dining facilities or additional luxuries planned. However, his testimony has drawn backlash after it appeared to contradict official documents from the Federal Reserve, which outline enhancements that include private dining areas and rooftop gardens. Filings with the National Capital Planning Commission suggest a more extravagant scope for the project than Powell acknowledged, raising further skepticism.
The renovation project has already seen its budget increase significantly, swelling from an initial estimate of $1.9 billion to $2.5 billion—and sparking outrage amid a period of significant losses reported by the Federal Reserve. In fact, the Fed has documented losses totaling $233 billion over the past three years due to rising interest rates and decreased earnings from bond holdings. These financial setbacks have led the central bank to operate at a loss for the first time in its history, with Powell’s administration facing intensified scrutiny for what critics call imprudent spending.
Amid growing frustration, President Trump shared a handwritten note with Powell, suggesting that interest rates be lowered, a move that reflects deepening discontent within the administration about the Fed’s financial strategies. Lawmakers have expressed concern that the renovation’s expenses should not be funded by taxpayer dollars, particularly during a time when the Fed is grappling with extensive financial challenges.
Senator Tim Scott of South Carolina likened the planned renovations to the “Palace of Versailles,” criticizing the spending against the backdrop of the Fed’s financial losses. The extraordinary nature of the planned upgrades has prompted calls from various sectors, including influential figures like Elon Musk, for a thorough examination of the expenditures.
Stakeholders are keenly watching the situation unfold, as the implications of the renovation scandal could extend beyond individual accountability. With mounting pressure on Powell and the central bank, the eyes of the financial world remain fixed on how these controversies may impact future monetary policy, especially as the Fed seeks to regain stability amidst ongoing economic challenges.