US Federal Housing director calls on Congress to investigate Fed’s Powell over $2.5B Palace scandal

Federal Reserve Chair Jerome Powell faces intense scrutiny after accusations of lying to Congress about the scope of a planned $2.5 billion headquarters upgrade. Federal Housing Finance Administration Director Bill Pulte, the nation’s top mortgage regulator, has called for an immediate Congressional investigation into Powell.

“I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed ‘for cause,’” Bill Pulte said.

Powell had previously testified before the Senate that the project would not include luxurious features. He said, “There’s no VIP dining room, there’s no new marble. There are no special elevators […] There are no new water features, there’s no beehives, and there’s no roof terrace gardens.” However, official documents have revealed a starkly different picture.

Lawmakers call out Powell for making false statements under oath

According to reports, the renovation costs have surged by 30% from the original $1.9 billion estimate. “The private dining rooms on Level 4 (of the Fed’s Eccles building) will be restored,” reads one excerpt from the filing with the National Capital Planning Commission. “The Governors’ private elevator will be extended to discharge at the dining suite level.”

The documents also expressly mention vegetated roof terraces that will welcome urban wildlife and pollinators, and new marble and water features. This has reflected poor financial management within the Fed, which has sparked outrage and calls for accountability, with the project’s ballooning costs only adding fuel to the fire.

Andrew T. Levin, a professor of economics at Dartmouth College who served as an economist and advisor to the Fed’s board from 1992 to 2012, has urged Congress to step in and punish Powell for lying to lawmakers.

“A top Fed official cannot be permitted to make false statements under oath at a congressional hearing. Such statements must be promptly corrected, and in egregious cases, subject to censure by the Senate,” Andrew Levin said.

In addition, Sen. Cynthia Lummis, a majority member of the Senate Banking Committee, said that Powell was clearly not prepared for his testimony and should be embarrassed. 

According to her, Powell made several factually inaccurate statements to the Committee regarding the Fed’s plush private dining room and elevator, skylights, water features, and roof terrace. 

She said, “This is typical of the mismanagement and ‘don’t bother me’ attitude that Chair Powell has always shown.” Sen. Tim Scott also called out Powell’s report as misleading and inaccurate.

Is this a leeway to frustrate Powell out of the Fed?

The move follows harsh public criticism of Powell from Pulte and his boss, President Donald Trump, over the Fed’s reluctance to lower its benchmark interest rate . 

Since December, the Federal Reserve has kept its main interest rate steady at 4.25% to 4.5%. Trump has called the Fed chair a “stupid person,” and Pulte used social media to accuse Powell of political bias and call for his retirement.

The revelations come at a time when the Fed is struggling with mounting losses. They stand at $233 billion over the past three years. 

For this reason, Vice President JD Vance asked Powell to explain why he refused to lower interest rates when he could risk anything during Biden’s administration. However, Powell defended current interest rate levels, pointing to the Fed’s dual mandate of maximum employment and price stability. He said that political considerations can play no role in rate policy.

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