Tensions between the White House and the Federal Reserve have significantly escalated, with President Donald Trump publicly calling for the resignation of Fed Chair Jerome Powell. This demand intensifies pressure on the central bank’s monetary policy and governance, adding a critical new dimension to the long-standing debate over interest rates and the Fed’s operational transparency, particularly following recent allegations of deceptive testimony by Powell.
For several months, President Trump has openly expressed frustration with Chair Powell’s management of monetary policy, asserting that the Federal Reserve’s reluctance to lower interest rates has imposed substantial economic costs on the United States. In direct communications, the President highlighted that other nations maintain significantly lower interest rates compared to the U.S., reiterating his conviction that current rates are “artificially high.” White House Press Secretary Karoline Leavitt relayed the President’s message, which accused Powell of being “too late” in his policy adjustments, leading to “hundreds of billions of dollars” in national losses despite a perceived absence of inflation.
Allegations of Deceptive Testimony
The call for resignation gained considerable momentum following serious accusations from Bill Pulte, Director of the Federal Housing Finance Agency (FHFA). Pulte publicly demanded a congressional investigation into Chair Powell, citing what he characterized as “deceptive” testimony to the Senate Banking Committee. Pulte alleges that Powell made factually inaccurate statements concerning a $2.5 billion renovation project at the Federal Reserve headquarters in Washington, D.C. These alleged inaccuracies, according to Pulte, pertained to specific features of the renovation, including a “plush private dining room and elevator, skylights, water features and roof terrace.” Senator Cynthia Lummis (R-Wyo.) was quoted by Pulte, reinforcing the claim that Powell’s statements to the Committee were inaccurate regarding these expenditures. Pulte described the situation as “malfeasance” and sufficient grounds for Powell’s removal “for cause.”
Congressional Scrutiny and Presidential Endorsement
President Trump publicly endorsed Pulte’s stance, reposting a Bloomberg article on the FHFA head’s call for an investigation to his Truth Social account, accompanied by the statement, “‘Too Late’ should resign immediately!!!” These allegations have also prompted notable reactions from Capitol Hill. House Judiciary Committee Chair Jim Jordan (R-Ohio), when questioned about Pulte’s demand for an investigation, indicated that “everything is on the table.” Speaking with Bloomberg, Jordan emphasized the committee’s constitutional duty to oversee the executive branch, suggesting that Powell’s actions could fall under this purview. The Federal Reserve, when contacted for comment, declined to issue a statement regarding these developments.
The confluence of sustained presidential criticism over monetary policy and recent allegations of impropriety regarding the central bank’s operations marks a critical juncture for the Federal Reserve’s independence and its relationship with the executive and legislative branches. The outcome of these mounting pressures and potential investigations will have significant implications for the future direction of U.S. economic policy and broader institutional trust.
Michael Carter holds a BA in Economics from the University of Chicago and is a CFA charterholder. With over a decade of experience at top financial publications, he specializes in equity markets, mergers & acquisitions, and macroeconomic trends, delivering clear, data-driven insights that help readers navigate complex market movements.