despite growing calls from fellow republicans to ease tensions, president donald trump remains unwilling to retract his criticism of federal reserve chair jerome powell.
“he overspent by billions of dollars,” trump told reporters at the white house on tuesday morning before heading to michigan. “so, he’s either incompetent or corrupt. i don’t know which one he is, but he certainly hasn’t done a good job.”
on sunday, powell released an unusual video statement confirming that he was under criminal investigation for testifying before congress about the federal reserve’s headquarters renovation project. powell stated that the investigation was retaliation for his repeated defiance of trump’s wishes regarding the fed’s independent interest-rate-setting authority.
in a nearly two-minute video released by the federal reserve, powell said: “the threat of criminal charges stems from the fact that the federal reserve sets interest rates based on our best judgment of what serves the public interest—not on the preferences of the president.”
powell and the federal reserve have repeatedly denied that there was anything unreasonable about the $2.5 billion renovation project. in july, powell accompanied trump on a site visit, where the two engaged in a heated debate over the plan in front of reporters.
“you’re just adding another floor—nothing more,” powell said in july, after trump cited a figure higher than other estimates. “that building was completed five years ago.”
the department of justice investigates the federal reserve
here’s what economic and business leaders are saying about the doj’s investigation into the federal reserve.
central bank governors around the world are rallying behind federal reserve chair jerome powell, standing by him in his battle with trump.
the criminal investigation into powell has disrupted trump’s plans to find a new fed chair.
the controversy behind jerome powell’s senate testimony—from the vip dining room to the dedicated elevator.
according to the faq section on the federal reserve’s website, the project’s costs exceeded expectations due to a variety of factors, including design changes, higher-than-expected asbestos content, and rising material costs.
trump told nbc news that he had no knowledge of the grand jury subpoena issued to the federal reserve. amid the public outcry, u.s. attorney general for the district of columbia, jenny piro, stated that the department of justice had no choice but to issue the subpoena to obtain the relevant information.
piro released a statement on x late monday night, saying: “the u.s. attorney’s office had contacted the federal reserve multiple times to discuss cost overruns and the chair’s testimony before congress—but these requests were consistently ignored. as a result, we were left with no option but to pursue legal action—and this is not a threat.”
a source familiar with the matter told business insider that the federal reserve received two emails from the department of justice, dated december 19 and december 29. neither email mentioned any deadlines or the threat of criminal investigation. the federal reserve had not responded to either email before receiving the criminal subpoena last friday.
in 2017, trump nominated then-federal reserve board governor jerome powell as fed chair. since then, trump’s attitude toward powell has grown increasingly cold—and at one point, trump even considered firing the fed chair. however, legal experts have debated whether any president has the authority to do so.
the criminal investigation into powell could prove costly for the white house. powell’s term as chairman of the senate banking committee will end in may. for months, trump has been publicly searching for his successor. in a closely divided senate, where the republican party holds a narrow 13–11 majority, trump cannot afford to lose the support of any potential nominee from the gop.
following powell’s statement, north carolina republican senator tom tillis declared that he would not support any of trump’s nominees until the investigation was “completely resolved.” tillis sits on the senate banking committee, which is composed of a 13–11 republican majority. if tillis continues to oppose, the committee could reach an impasse—which would likely lead to the nomination being stalled, or at the very least force the republican party to take the rare step of amending senate rules.
besides tillis, several other republicans on capitol hill also condemned the criminal investigation. three living former fed chairs—including alan greenspan, appointed by president reagan—have publicly endorsed powell, as have the current leaders of central banks around the world. |
