Sunday night, we learned that the Trump Administration had opened a criminal investigation into Fed chair Jerome Powell.
Trump nominated Powell to the position in 2017 and Biden reappointed him in 2022.
The investigation, led by TV Judge/US Attorney for DC Jeanine Pirro, is ostensibly about whether Powell lied to Congress about the scope of a renovation of the Fed’s DC headquarters.
Last July, Trump publicly attacked Powell for going over budget on the renovation, claiming there could be fraud. (LOL says anyone who’s done construction ever, it’s always over budget.) Rep. Anna Paulina Luna (R-Fla.) said she made a criminal referral to the Department of Justice in July.
There is a pattern here: Trump has threatened to fire Powell and has attacked him for not cutting interest rates in the past.
Though Powell alone does not have the power to set interest rates (there’s a 12-member board that votes 8 times a year, which includes the 7 Fed Governors and 5 Reserve Bank presidents), he is the most influential voice at the Fed.
Powell’s term as chair of the Board of Governors is set to end in May of this year; however, his seat on the board doesn’t expire until 2028. People had been thinking he’d step down, but are now thinking he’ll stay to fight.
Currently, 3 of the 7 members of the Board of Governors are Trump appointees, with no Democrats’ terms expiring soon.
