DoJ probes Fed chair Powell as Trump ups pressure
DoJ probes Fed chair Powell as Trump ups pressure
Federal prosecutors open a criminal inquiry into Jerome Powell, heightening tensions over Fed independence amid sustained White House pressure to cut rates.
Federal prosecutors have opened a criminal investigation into Jerome Powell, the chair of the Federal Reserve, in a development that marks a dramatic escalation in the push-and-pull over U.S. monetary policy. The inquiry centers on how the Fed handles renovations to its Washington headquarters and related testimony Powell gave to a Senate committee. News of the DoJ action adds a new political chapter to a feud that has long tested the Fed’s independence from elected officials.
Powell called the probe unprecedented, saying he believes it arises from President Trump's anger at the Fed's decision not to cut interest rates despite public pressure. He stressed that the central bank must be free to set policy based on data and economic conditions, not political threats. Powell added that no one, not even the Fed chair, is above the law, but noted that the action should be viewed in the broader context of attempts to influence monetary policy.
Trump, in remarks and interviews, insisted he knew nothing about the investigation while continuing to push for cheaper borrowing costs.
The case raises questions about the delicate balance between political oversight and the Fed’s mandate to maintain price stability and employment. Analysts warn that the appearance of political interference could unsettle markets and damage confidence in the central bank.
As the DoJ response and congressional reactions unfold, observers say the episode could redefine the boundaries of presidential influence over monetary policy and test the Fed’s resolve to operate independently.
