What's happened
The U.S. Attorney in DC has requested information from the Federal Reserve about a $2.5 billion headquarters renovation, prompting a criminal investigation into Fed Chair Jerome Powell. The probe follows President Trump’s criticism and concerns over potential political pressure on monetary policy.
What's behind the headline?
The investigation signals a significant escalation in Trump's efforts to influence the Federal Reserve, framing it as a challenge to the institution's independence. The legal actions against Powell, including subpoenas related to his 2025 Senate testimony, appear to be politically motivated, aiming to undermine the Fed’s credibility and pressure it into aligning with presidential preferences. This move risks destabilizing the central bank’s ability to set monetary policy based on economic evidence, potentially leading to increased market volatility. The timing suggests an attempt to sway policy decisions amid economic concerns, such as inflation and interest rate management. If successful, this could set a dangerous precedent where political interference hampers the Fed’s capacity to operate independently, impacting long-term economic stability. The broader implication is a potential erosion of institutional independence, which could influence future monetary policy and investor confidence.
What the papers say
The Independent reports that Pirro claims her office's requests were ignored, necessitating legal process, and emphasizes that the investigation is not about indictments but about ensuring cooperation. The NY Post highlights Pirro’s downplaying of Powell’s suggestion of facing a criminal indictment, framing it as an unprecedented action driven by political motives. The New York Times provides context on the escalation of Trump’s pressure campaign, emphasizing concerns over Fed independence and the political use of legal threats to influence monetary policy. All sources agree that the investigation is politically charged, with Trump criticizing Powell over the renovation costs and interest rate policies, aiming to sway the Fed’s decisions.
How we got here
The investigation centers on Powell’s oversight of a costly renovation of the Fed’s Washington headquarters, which has faced scrutiny over expenses and management. Trump has long criticized Powell, accusing him of inefficiency and seeking to influence Fed policies, especially interest rate decisions. The probe was approved in November by U.S. Attorney Jeanine Pirro, a Trump ally, amid ongoing tensions over Fed independence.
Go deeper
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Jerome Hayden "Jay" Powell is the 16th Chair of the Federal Reserve, serving in that office since February 2018. He was nominated to the Fed Chair position by President Donald Trump, and confirmed by the United States Senate.
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The United States Department of Justice, also known as the Justice Department, is a federal executive department of the United States government responsible for the enforcement of the law and administration of justice in the United States, and is equivale
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Jeanine Ferris Pirro is an American television host and author, and a former New York State judge, prosecutor, and politician. Pirro is the host of Fox News Channel's Justice with Judge Jeanine.
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.