Jerome Powell 'Fatigued' and Facing Resignation Rumours Over Controversial $2.5B Fed Palace Overhaul

US Federal Reserve chair Jerome Powell is mulling resignation as pressure mounts for scrutiny into whether he was truthful to Congress about the Fed's 'Palace of Versailles' renovation to its headquarters in Washington, DC, a senior government official told The New York Post last week.

Another senior Trump Administration official told the media outlet that 'high-level, credible sources' inside the government are of the view that Powell is deciding if he should resign from his job.

The source said that Powell 'had been feeling the heat' and had grown 'fatigued' since The New York Post published an April story about central bank bureaucrats spending £1.8 billion ($2.5 billion) on the overhaul of its DC offices that Senator Tim Scott said was akin to the 'Palace of Versailles.'

'Why would you stay at a party when no one wants you there?' the insider added.

On rumours of Powell's resignation, Fannie Mae and Freddie Mac chair Bill Pulte posted on X, formerly Twitter, that it would be the 'right decision for America, and the economy will boom.'

US President Donald Trump has consistently described Powell as 'too slow' to cut interest rates. Last week, Trump appointed three members to the National Capital Planning Commission (NCPC), which oversees federal development projects. The reshuffle at the Commission, with a total of five voting members, is viewed as another step to force Powell to step down. Note that Trump nominated Powell as Fed chair during his first term.

A different government official said the rising criticism of Powell is part of a game of '4D chess' being played by Trump and his allies to make him resign.

Powell was accused by critics, including Pulte, of misleading Congress when he hit out at The Post's coverage, which he branded 'misleading and inaccurate.'

'There's no VIP dining room. There's no new marble. There are no special elevators,' Powell said during a late June hearing before the Senate Banking Committee. 'There are no new water features, there are no beehives, and there's no roof terrace gardens.'

However, his comments differ from the project's planning document signed by the NCPC in 2021. The project costs increased by 30% from its initial estimate of £1.4 billion ($1.9 billion).

The US Office of Management and Budget chief, Russell Vought, also told Powell last week in a letter that Trump is 'extremely troubled by your management of the Federal Reserve System.'

'Instead of attempting to right the Fed's fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington, DC headquarters,' he noted. Vought demanded that Powell provide answers to multiple questions in the coming days.

However, a senior White House source said Powell was here to stay. 'There are no plans to change the Fed chair,' the person said.

The New York Post reportedly secured a copy of the Fed's 2025 budget through the Freedom of Information Act, which confirmed the cost of the renovation work for the first time. However, Powell maintained that several of the plans approved by the NCPC had since been discarded.