Federal Housing Finance Agency Director Bill Pulte was the “driving force” behind the Department of Justice’s decision to launch a criminal investigation into the Federal Reserve, according to a report.
The DOJ served the central bank with grand jury subpoenas on Friday as it probes testimony given by the Fed’s chairman, Jerome Powell, to the Senate Banking Committee last June about the cost of renovations to the bank’s historic headquarters in Washington, D.C.
Powell responded with a stinging video statement Sunday in which he said: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.”
U.S. Attorney for D.C. Jeanine Pirro reportedly signed off on the investigation in November, but Bloomberg reports it is Pulte who was behind the move.
The administrator, however, has denied involvement, telling Bloomberg Television in an interview, “The DOJ is outside of my purview. This is out of my purview. I don’t know anything about it, and I would defer you to the DOJ.”
Pulte, who was recently described as an “agent of chaos” by The Financial Times, has proved “a vocal force within the administration, pushing controversial housing policy ideas and investigating Trump’s foes for mortgage fraud,” Bloomberg reports.
The FHFA head submitted a criminal referral to the DOJ last August regarding economist Lisa Cook, a member of the Fed’s Board of Governors, alleging mortgage fraud. President Donald Trump then fired her, but Cook denied the allegation and challenged her dismissal.
The case is currently before the Supreme Court, with oral arguments scheduled for this week.
Bloomberg reports that several of Trump’s allies were “alarmed” by Friday’s dramatic escalation of his long-running feud with Powell over interest rates, amid fears it could upset the bond market.
Treasury Secretary Scott Bessent is understood to have made his disapproval clear to the president, while several Republican senators, including Majority Leader John Thune, Lisa Murkowski, Susan Collins, and Thom Tillis, have also expressed objections.
Trump himself appointed Powell in November 2017 during his first term, but has since blamed his predecessor, Joe Biden, for reappointing the chairman, having become frustrated by his dogged insistence on his institution’s independence.
The president denied having any prior knowledge of the DOJ investigation into the Fed in an interview with NBC News on Sunday, despite Pulte traveling to Florida with him two days earlier, as subpoenas were being served, according to Bloomberg.
Pulte is reportedly a member of the president’s Mar-a-Lago club in Palm Beach and frequents Trump’s golf course nearby.
Powell’s term as chair of the Fed ends in May, although he will remain as a governor of the bank until January 2028.
The president has said he has already made up his mind about who will replace him, but has not publicly named his candidate.
White House National Economic Council Director Kevin Hassett and former Fed governor Kevin Warsh are believed to be top contenders.
