Rumors about Federal Reserve Chairman Powell's impending resignation are escalating. On July 11, local time, William J. Pulte, chairman of the board of directors of Fannie Mae and Freddie Mac under the FHFA, issued a statement expressing excitement about the rumors of Powell's resignation.
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac, and 11 federal home loan banks. These government-sponsored enterprises provide over $8.5 trillion in funding to the U.S. mortgage market and financial institutions.
Reporters confirmed the existence of this statement on the agency's official website. The statement reads in full: “Reports indicate that Jerome Powell is considering resigning, which encourages me. I believe this is the right decision for America, and the economy will thrive.”
Previously, Pulte had repeatedly called for Powell to resign, but the reasons were unrelated to interest rate cuts; instead, he accused Powell of providing “deceptive” testimony to the Senate. A senior official in the Trump administration confirmed to the media on Friday that Powell is “considering resigning” due to increasing pressure regarding whether he misled Congress about the headquarters renovation project.
In April of this year, a report from the Washington Post revealed that the renovation costs of the Federal Reserve office building had skyrocketed by 30%, increasing from $1.9 billion to $2.5 billion. A report from the Federal Reserve's internal oversight body, the Office of the Inspector General, confirmed this report: As of February, the latest renovation costs for the Federal Reserve building are expected to reach $2.5 billion, up from the $1.9 billion predicted two years ago.
Subsequently, Trump and congressional members began to direct their criticism at Powell. During the June congressional hearing, Senate Republican Tim Scott harshly criticized the Federal Reserve's renovation project. Scott said, “During this difficult time, the Federal Reserve spent billions on extravagant renovations of its office in Washington, D.C.”
Scott listed a series of luxury upgrade projects he referred to. “We all agree that updating aging infrastructure is a reasonable need, but it sends the wrong message when public funds are spent on luxury upgrades while seniors can barely afford Formica countertops,” Scott said.
Although Powell acknowledged that the renovation project has gone over budget, he refuted the related accusations.
Powell stated that the Federal Reserve headquarters building, constructed between 1935 and 1937, is indeed in need of major renovations. He pointed out that media reports are misleading and inaccurate in many ways and denied several luxury projects.
“No VIP restaurant, no new marble, no dedicated elevators. No new water features, no beehives, and no rooftop terrace garden,” Powell said at the hearing.
However, the unfavorable news for Powell is that the projects he mentioned are already included in the project planning documents approved by the National Capital Planning Commission (NCPC) in 2021.
Russ Vought, head of the White House Office of Management and Budget (OMB), raised questions about this in a letter on Thursday.
“The president is extremely troubled by your management of the Federal Reserve System. Instead of trying to straighten out the Federal Reserve's finances, you are pushing forward with extravagant renovations to the Washington headquarters.”
Vought also pointed out that if Powell modifies the plans without NCPC approval, he may be in violation of the National Capital Planning Act. He requested Powell respond to a series of questions by next week.
Similarly, last week, Trump appointed three new members to the NCPC, which oversees federal development projects. This move is widely interpreted as another effort to exert greater pressure on Powell, given that there are five voting members on the committee.
A senior government official told the media that a series of attacks against the 72-year-old Powell are an attempt by the president and his allies to further force him to resign. The official added, “Why would you stay when no one wants you at the party?”