Fed Chair Powell Faces Congressional Probe Over $2.5 Billion Headquarters Upgrade

Federal Reserve Chair Jerome Powell is under intense scrutiny following allegations that he misled Congress about the scope of a planned $2.5 billion headquarters upgrade. The controversy has escalated with calls for a Congressional investigation into Powell's actions. Bill Pulte, the nation’s top mortgage regulator, has demanded an immediate probe into Powell's political bias and his testimony before the Senate, suggesting that these actions are grounds for his removal.

Powell had previously assured the Senate that the renovation project would not include any luxurious features. He specifically mentioned that there would be no VIP dining room, no new marble, no special elevators, no new water features, no beehives, and no roof terrace gardens. However, official documents have revealed a different reality. The renovation costs have increased by 30% from the original $1.9 billion estimate, and the project includes private dining rooms, a governors' private elevator, vegetated roof terraces, new marble, and water features.

This discrepancy has sparked outrage and calls for accountability, highlighting poor financial management within the Fed. The project's ballooning costs have only added to the public's frustration. 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 take action against Powell for his false statements under oath. Levin emphasized that such behavior cannot be tolerated from a top Fed official and that prompt correction and censure are necessary.

Senators have also expressed their disapproval. Sen. Cynthia Lummis, a majority member of the Senate Banking Committee, criticized Powell for being unprepared and making factually inaccurate statements. She described Powell's attitude as one of mismanagement and indifference. Sen. Tim Scott also called out Powell’s report as misleading and inaccurate, adding to the growing chorus of criticism.

The controversy comes at a time when the Fed is already facing significant challenges, including mounting losses of $233 billion over the past three years. The revelations have fueled public criticism from figures like President Donald Trump, who has called Powell a “stupid person,” and Pulte, who has accused Powell of political bias and called for his retirement. The Fed's reluctance to lower its benchmark interest rate, which has remained steady at 4.25% to 4.5% since December, has also drawn criticism from Vice President JD Vance, who questioned Powell's refusal to lower interest rates during Biden’s administration. Powell, however, defended the current interest rate levels, citing the Fed’s dual mandate of maximum employment and price stability, and asserted that political considerations should play no role in rate policy.