Congress Should Investigate Federal Reserve Chair Powell, Says FHFA Chief

William Pulte, who heads the Federal Housing Finance Agency.. (Kayla Bartkowski/Getty Images)

Federal Reserve Chair Jerome Powell is facing heightened political scrutiny over the central bank’s $2.5 billion headquarters renovation, with the head of the Federal Housing Finance Agency now urging Congress to investigate whether Powell misled lawmakers.

William Pulte, FHFA director and chairman of Fannie Mae and Freddie Mac, released a statement Wednesday accusing Powell of providing deceptive testimony to Congress and suggesting there may be grounds for his removal.

President Donald Trump called for Powell to “resign immediately” in a post on Truth Social late Wednesday, linking to a story referencing Pulte’s comments.

House Judiciary Committee Chair Jim Jordan told Bloomberg Television on Wednesday that lawmakers hadn’t discussed the issue, but said that they will look at it.

Pulte’s remarks add to growing Republican criticism of the renovation, which has become a political flashpoint as frustration builds on the right over the Fed’s handling of interest rates. The Federal Reserve didn’t immediately respond to a request for comment.

Currently at issue is an extensive renovation of the Fed’s Marriner S. Eccles Building and adjacent properties in Washington, a project meant to modernize the 90-year-old complex. The overhaul is expected to cost $2.5 billion and be completed by 2027.

Fed officials say the work is necessary to address serious infrastructure deficiencies including outdated safety systems, inadequate security, and water damage. Powell defended the project during a June Senate Banking Committee hearing, saying the current building was unsafe and not waterproof.

“We do take seriously our responsibility as stewards of the public’s money,” said Powell. “No one wants to do a renovation of a historic building.”

Internal planning documents from 2021 have fueled the controversy, referencing features like rooftop terraces, private dining rooms, and water features. Powell has said those elements aren’t part of the final plan.

“All of the inflammatory things the media carried are not in the current plan,” Powell said before Congress last week. “There is no VIP dining room, no new marble, no special elevators. No new water features, no beehives and no roof terrace gardens.”

The Fed has faced growing criticism from Republicans over the project’s price tag, which has grown from $1.9 billion to $2.5 billion. Elon Musk previously drew attention to the renovations as part of his Department of Government Efficiency initiative.

“We should definitely look to see if the Fed is spending $2.5 billion on their interior designer,” Musk told reporters in May. “That’s an eyebrow raiser.”

Sen. Cynthia Lummis of Wyoming, a Republican, argued after Powell spoke that his testimony contradicted the available evidence and raised questions about the transparency of the central bank.

Now, Pulte’s statement marks a significant escalation, with a top Trump official publicly calling on Congress to open a formal investigation into Powell’s conduct. He framed the renovation as part of a larger management failure at the Fed and said lawmakers should determine whether Powell’s actions justify removal for cause.

President Donald Trump has also amplified the criticism, accusing Powell and the Fed of mismanagement.

He has frequently clashed with Powell over interest rates, arguing the Fed’s policies are worsening affordability challenges in the housing market and slowing economic growth. The president has said that he could soon announce his nominee for Powell’s successor, nearly a full year before the chair’s term expires in May 2026.

Powell has said that the Fed is holding interest rates steady largely in response to the economic uncertainty caused by Trump’s tariff policy.

While political pressure is building, Powell’s position remains relatively legally protected. A recent Supreme Court ruling appeared to reaffirm limits on the president’s ability to remove the Fed chair, distinguishing the central bank from other quasi-independent agencies and reinforcing statutory safeguards around its leadership.

Still, the fight over the Fed’s renovation represents a new front in the political battle over Powell’s tenure and the bank’s policies.

Write to Nicole Goodkind at nicole.goodkind@barrons.com.