TL;DR

Powell under pressure as $2.5B Fed HQ project faces criticism from lawmakers and agency officials. Trump demands Fed slash rates to 1.25%. William Pulte says Powell stepping down would be “right decision” as Fed meeting approaches July 29.

Powell Faces Pressure Amid HQ Spending Backlash

Federal Reserve Chair Jerome Powell is facing new pressure amid reports he is considering stepping down. A senior government official said that “high-level, credible sources” believe Powell is weighing whether to leave his position. The pressure comes after criticism over the $2.5 billion renovation of the Fed’s Washington headquarters.

Chairman Jerome Powell has grossly mismanaged the Fed.

While continuing to run a deficit since FY23 (the first time in the Feds history), the Fed is way over budget on the renovation of its headquarters.

Now up to $2.5 billion, roughly $700 million over its initial cost.… pic.twitter.com/lHK4cWlAvf

Senator Tim Scott described the spending as resembling the “Palace of Versailles.” The project, revealed earlier this year, has faced backlash across political lines. Powell addressed the issue in a June Senate hearing, saying that some of the more extravagant descriptions are misleading and inaccurate.

Donald Trump, who nominated Powell in 2017, has again called for interest rate cuts. The current Fed Funds rate is 4.25%–4.5%. Trump said it should be between 1.25% and 1.5%. Speaking in June, he said he had called Powell “every name in the book” to try and push for lower rates.

Peter Schiff, a prominent financial commentator, echoed the sentiment, saying that if Powell steps down, his successor could move quickly to slash rates. Schiff added that such a move could “put the nail in the dollar’s coffin,” driving long-term rates, inflation, and gold prices higher.

Agency Head Says Powell’s Exit Would Be ‘Right Decision’

William Pulte, head of the Federal Housing Finance Agency and chairman of the Fannie Mae and Freddie Mac boards, released a public statement supporting Powell’s potential resignation.

“I’m encouraged by reports that Jerome Powell is considering resigning. I think this will be the right decision for America, and the economy will boom,” he said.

When asked for comment, the Federal Reserve referred to Powell’s past statements that he intends to serve out his term, which runs through May 2026. No further comment was given.

Attention Turns to Fed’s July Meeting

The next Federal Open Market Committee meeting is scheduled for July 29–30. Futures data from the CME FedWatch tool shows a 93% chance that rates will remain in the current range. The Fed has held rates steady since early 2024 and projects two rate cuts in 2025.

Powell has stated the Fed will assess how tariffs and inflation evolve before adjusting policy. A recent Supreme Court ruling has limited the president’s power to remove a Fed chair, which may delay any leadership change if Powell chooses not to resign.