Call for Investigation into Fed Chair Powell
On Wednesday, supervisors of Fannie Mae and Freddie Mac urged Congress to look into Federal Reserve Chairman Jerome Powell, alleging that he misled lawmakers.
During a testimony before the Senate Banking Committee last week, Bill Prute, director of the Federal Housing and Finance Agency (FHFA), accused Powell of lying while addressing questions about the Fed’s controversial renovation project in Washington, DC.
Powell had claimed that some extravagant elements of the $2.5 billion renovation plan were part of an earlier plan and discarded later. When pressed by senators, he stated that certain costs, like elevator repairs leading to board members’ offices, were standard maintenance expenses.
Nonetheless, Prute asserted that Powell provided “deceitful” testimony, suggesting that this could warrant his dismissal.
“This is nothing but cheating,” Prute commented.
Prute’s actions represent a significant move from one independent financial regulator to another. As the FHFA head, he oversees the financial health of Fannie Mae and Freddie Mac and collaborates with other regulators, including Powell, to shield Americans from economic shocks.
In the wake of pressure from President Trump, Prute has been vocal in advocating for Powell’s resignation, claiming the Fed’s current interest rates—around 4.25% to 4.5%—are detrimental to the U.S. economy. He specifically pointed out contemporary challenges in the housing market, where mortgage rates are close to 7% on average for 30 years.
However, the Fed must evaluate a multitude of factors when making decisions, including stabilizing the economy and addressing unemployment levels.
Prute emphasized that his campaign against Powell aligns with his responsibilities overseeing Fannie Mae and Freddie Mac, which package U.S. mortgages into investment products.
“As head of Fannie Mae and Freddie Mac, Powell is delaying necessary changes to support the housing market by not lowering rates promptly. He needs to resign, and it should happen soon,” Prute stated.
Additionally, Prute, who comes from a prominent family in housing development, holds substantial personal wealth linked to the housing industry. In a recent financial disclosure, he reported assets exceeding $80 million related to housing, property management, and HVAC companies.
