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The call is coming from inside the house.
For all the talk about the Fed’s prolonged challenge to tame the frenzy of the COVID-era housing market, it’s the central bank’s own headquarters that’s drawing intense scrutiny from the White House.
President Trump and administration officials escalated their public campaign to oust Fed Chair Jerome Powell this week, focusing on what they describe as mismanagement of the Fed’s renovation project in Washington, D.C.
On Monday, one of the Trump allies contending to replace Powell, National Economic Council Director Kevin Hassett, said, “We’ve got a real problem of oversight and excess spending” in an interview on CNBC. Powell has asked an inspector general to review the cost of the Fed’s building renovations. And the central bank published an FAQ to explain the costs and decision making behind the overhaul and modernization project, attempting to set the record straight and rebut criticism and misinformation. (The Fed said there are no VIP dining rooms being constructed, there is no VIP elevator, and new water features that had been planned have been eliminated.)
But that’s just one of the Fed’s housing problems.
On Tuesday, the Bureau of Labor Statistics will release fresh inflation figures for the month of June in the latest Consumer Price Index (CPI), offering a broad measure of pricing pressures across the US economy.
Housing continues to be one of the most stubborn rising costs consumers face. And analysts expect shelter to play a key role in inflation firming up again. In last month’s release, shelter costs figured as the primary factor in the CPI’s monthly increase.
Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments
Home price appreciation has outstripped earnings growth for decades. As Zillow and Redfin house hunters are painfully aware, home values have tripled in the last 25 years. But the crisis-induced low interest rates of the pandemic years supercharged home values. Years later, buyers are still pining for the brief era of 3% to 4% interest rates.
More than half of all American adults say they wouldn’t be comfortable buying a home this year, no matter what happens with mortgage rates, according to Bankrate’s 2025 Mortgage Rates Sentiment Survey published on Monday, highlighting a continuing lock-in effect.