President Donald Trump intensified his public campaign against Federal Reserve Chair Jerome Powell this week, calling for Powell’s immediate resignation after allegations surfaced that the central bank chief gave deceptive testimony to Congress and mismanaged taxpayer-funded renovations of the Federal Reserve headquarters.
At the center of the controversy is a letter from FHFA Director Bill Pulte, who on Wednesday urged Congress to investigate Powell, citing alleged “factually inaccurate statements” Powell made to the Senate Banking Committee regarding the $2.5 billion renovation of the Fed’s Washington, D.C. building. Pulte accused Powell of misleading lawmakers about the project’s costs, including features such as a private dining room, rooftop terrace, and water features.
“Chairman Powell needs to be investigated by Congress immediately,” Pulte wrote on X. “This is nothing short of malfeasance and is worthy of ‘for cause.’”
Powell had testified last week that concerns over the scope and cost of the renovations were exaggerated. However, Sen. Cynthia Lummis (R-WY) sharply disputed his claims, saying Powell’s testimony contained numerous factual errors about the building’s amenities and expenditures.
In response, Trump reposted a Bloomberg article on the controversy to Truth Social, declaring:
“’Too Late’ should resign immediately!!!”
The nickname is a continuation of Trump’s months-long criticism of Powell for not cutting interest rates, which the president argues are stalling economic growth and costing the U.S. “a fortune.”
“Jerome, you are, as usual, too late,” said White House Press Secretary Karoline Leavitt on Monday, reading a note from the president. “You have cost the USA a fortune and continue to do so. You should lower the rate by a lot. Hundreds of billions of dollars are being lost and there is no inflation.”
The tension reached another level Tuesday when Powell, speaking at the European Central Bank forum in Portugal, suggested that the Fed might have lowered interest rates this year if not for President Trump’s tariff policies.
“In effect, we went on hold when we saw the size of the tariffs,” Powell said. “Essentially all inflation forecasts for the United States went up materially as a consequence.”
While Powell said the full impact of tariffs on the economy has yet to materialize, he defended the Fed’s cautious approach, saying, “We’re simply taking some time.” Powell also emphasized the Fed’s commitment to political independence and nonpartisanship.
“We don’t take sides, we don’t play one side against the other,” he stated. “We stay out of issues that are not our bailiwick.”
The Federal Open Market Committee has held the benchmark federal funds rate steady for four straight meetings, citing persistent inflation concerns — a move the Trump administration views as economically stifling, especially as the president pursues tariffs to bolster domestic manufacturing and limit illicit imports such as fentanyl.
Although Trump publicly floated the idea of firing Powell last month, legal experts say the president’s authority to remove a Fed Chair “for cause” is murky at best under current law. However, new questions around Powell’s credibility before Congress may open the door for House investigations.
House Judiciary Chair Jim Jordan (R-OH) told Bloomberg on Wednesday that while no formal inquiry has begun, “everything is on the table.”
“We’ll take a look at that,” Jordan said. “Part of our constitutional duty is to do oversight of the executive branch.”
A spokesperson for the Federal Reserve declined to comment on the allegations or Trump’s remarks.
