The Federal Housing Finance Agency (FHFA) Director William Pulte called on Congress to investigate Federal Reserve Chairman Jerome Powell, alleging misleading testimony related to a $2.5 billion headquarters renovation project.
Despite Powell's denial of luxurious upgrades, Federal Reserve documents confirm the renovation plan includes a private restaurant, marble decorations, and a rooftop garden, contradicting his Senate testimony.
This scandal occurs as the Federal Reserve faces massive financial losses, drawing criticism from Trump and industry figures like Elon Musk.
The situation in Washington is heating up—and not just in temperature. FHFA Director and head of Fannie Mae and Freddie Mac, William Pulte, is targeting Federal Reserve Chairman Powell. His grievance? Powell's "deceptive testimony" on a jaw-dropping $2.5 billion headquarters renovation project, dubbed the "Versailles Plan" by critics.
In a leaked statement obtained by the New York Post, Pulte makes no attempt to hide his stance. He wants Congress to investigate, accusing Powell of being "politically biased" and "blatantly lying" to congressional members in recent testimony. "The smell is bad," he wrote, "Powell's statements are not just misleading—they constitute grounds for removal." Pulte is going all out.
Testimony Questioned
The controversy centers on Powell's denial last week in Senate Banking Committee testimony that the Fed headquarters renovation includes VIP restaurants, dedicated elevators, or luxurious rooftop gardens.
"No marble, no new water features, no dedicated elevators," Powell stated emphatically.
However... the facts seem to suggest otherwise. Documents submitted by the Federal Reserve to the National Capital Planning Commission (still publicly accessible) clearly list renovations including a private restaurant, elevators exclusive to board members, and a vegetation terrace designed to attract "urban wildlife"—all seemingly contradicting Powell's testimony.
Trump, Pulte, and the "MAGA" Microphone
President Trump has never shied away from criticizing Powell, and earlier this week again wrote a personal letter to the Fed Chairman requesting rate cuts. Now, Pulte has joined the chorus and is reportedly considering whether Trump can dismiss Powell "for cause," with pressure gradually mounting.
"One critic said: 'This isn't just an over-budget building project, it's an accountability issue. Taxpayers are footing the bill, and Powell doesn't seem to care.'"
Don't forget—the renovation budget has already grown 30% from $1.9 billion to $2.5 billion.
Where Is the Money Going?
According to the Federal Reserve's own documents, the renovation includes marble decorations, high-end restaurant suites, rooftop gardens, and more. Notably, JPMorgan's new skyscraper in New York is estimated to cost only $3 billion—and that's a 60-story entire building in Manhattan. So naturally, people are asking how the Federal Reserve's relatively small headquarters in Washington could cost almost the same.
Even Elon Musk has spoken out, calling the situation "frowning" and suggesting a thorough investigation by oversight bodies.
Fiscal Deficit and Growing Criticism
The timing of this scandal is particularly unfortunate. The Federal Reserve is currently under scrutiny for record financial losses—losing $114.6 billion in 2023 alone, primarily due to interest expenses exceeding bond returns. Overall, the Fed's deferred assets have reached $233 billion. Until this deficit is cleared, the Federal Reserve cannot remit profits to the U.S. Treasury, meaning less funding for education, defense, and healthcare.
So, yes, while the Federal Reserve insists these losses won't affect its operations, spending billions on a palace-like renovation in this context certainly deals a significant blow to its credibility.
