Jerome Powell faces intense scrutiny and a criminal referral over a $2.5 billion Fed building renovation. Bill Pulte, Trump-appointed agency head, demands answers while linking Powell’s high interest rates to a sluggish housing market. Trump allies call for Powell’s resignation as the Fed’s independence faces political heat.
Jerome Powell Faces Criminal Referral Over $2.5 Billion Fed Building Renovation
In a dramatic escalation of tensions between the Federal Reserve and the Trump administration, Federal Reserve Chairman Jerome Powell is now facing a criminal referral linked to the controversial $2.5 billion renovation of Federal Reserve buildings.
This comes after Bill Pulte, Director of the U.S. Federal Reserve Financing Agency and a prominent construction magnate, personally investigated the renovation site and raised serious concerns about the scale, transparency, and progress of the project.
Pulte, who has spent his life in construction and now oversees financial giants like Fannie Mae and Freddie Mac, expressed deep skepticism over the renovation’s reported cost. “They’re getting ready for scaffolding. They have concrete they’re putting in, new steel, new rebar. But it’s hard to believe you can spend two and-a-half billion dollars on this,” Pulte observed after visiting the site. He noted the lack of visible manpower, pointing out that only a handful of workers were seen on location during his visit.
Pulte did not mince words, directly questioning Powell’s role and accountability in the matter. “Where is Jerome Powell? Where did Jerome Powell put the $2.5 billion? He’s supposed to be the money manager for the world’s biggest economy. Something doesn’t smell right here,” he said during an appearance on Fox Business with Maria Bartiromo.
Adding to the fire, Pulte will take an official tour of the Federal Reserve building alongside Office of Management and Budget Director Russ Vought and White House Deputy Chief of Staff James Blair. This tour, expected to provide deeper insights into the renovation’s actual scope and execution, could become a turning point in the brewing scandal.
During the interview, Pulte also emphasized President Trump’s overwhelming electoral mandate, calling him the “most popular president we’ve ever had,” and compared Powell’s actions to open defiance of presidential authority. “We have one guy in the form of Jerome Powell who thinks he is more important than the economy and more important than everybody else… President Trump called him a stubborn mule, and rightly so.”
Drawing comparisons, Pulte highlighted that the entire Buffalo Bills NFL stadium was built for $2.2 billion—less than the renovation of the Federal Reserve building. “That’s a problem. I think he lied to Congress. Things will get worse for Jerome Powell, and he would be better off resigning,” Pulte asserted.
When asked whether Jerome Powell’s spending could be grounds for removal, Pulte stayed cautious, deferring legal questions to the White House and their lawyers, but reiterated his construction-based doubts over the justification and need for such high spending. He also urged a thorough investigation into contract approvals and Powell’s involvement.
This situation intensifies the policy and political feud between President Trump and Powell. While Trump has been calling for aggressive interest rate cuts to reduce the cost of capital and tackle the $36 trillion national debt and $2 trillion annual deficit, Powell has continued to maintain the Fed Funds rate at 4.5%, citing his dual mandate of inflation control and employment growth.
Pulte argued that inflation is no longer a valid reason to keep rates elevated. “Inflation for the last three months is at 1.6%. President Trump has absolutely crushed inflation. Yet the Fed Funds rate is not reflecting that. This is a big issue for the American people.”
He linked the Fed’s high interest rate policy to real-world economic struggles, particularly in housing and consumer lending. According to Pulte, higher interest rates are hurting mortgage approvals and slowing down construction due to builders’ fears about unsold inventory.
“He’s having enormous effects not just on home building, but also car loans, credit loans… This is really hurting real people,” Pulte said.
Pulte, echoing Trump’s position, insisted that the Federal Reserve should act in coordination with the President’s agenda. “He should be listening to President Trump. Trump is probably 100 times more successful in business than Jerome Powell,” he said, suggesting Powell’s economic stance is politically motivated and aimed at undercutting Trump’s booming economy.
Maria Bartiromo also weighed in, pointing out Powell’s timing on previous rate cuts. “He cut rates right before the last election. But after Trump won, he was done cutting,” she noted, fueling suspicions that Powell is being “too political.”
On the housing front, Pulte said current mortgage rates—hovering at 6.75%—combined with record-low home listings, are deepening the affordability crisis. He stated that the Fed’s policy is the primary bottleneck preventing a full housing recovery.
He emphasized that when Trump implemented tariffs, fears of inflation in construction didn’t materialize. “Trump won on the tariffs. He’s crushed inflation. So now, really the only thing is this Fed Funds Rate. Why is it at 4.5%?” Pulte questioned, further criticizing Powell’s lack of economic rationale.
“Jerome Powell is a lawyer—maybe that’s why he doesn’t understand math,” Pulte added sarcastically. “It’s like he’s trying to crash President Trump’s economy. He won’t be successful, but it’s frustrating.”
Both Bartiromo and Pulte agreed that Powell’s policies are out of sync with Trump’s economic momentum. As Pulte put it: “A new Fed Chair can’t come soon enough. We’ll have the best housing market and economy we’ve ever seen. Trump Number Two economy will be otherworldly.”
This clash over fiscal policy, interest rates, and construction spending at the Fed has now snowballed into a direct power struggle between the Federal Reserve and the White House. With a criminal referral potentially in motion, growing calls for Powell’s resignation, and ongoing investigations, the coming weeks could prove decisive for Powell’s future—and for the direction of U.S. monetary policy under Trump’s second term