DOJ Launches Criminal Probe Into Jerome Powell

DOJ Launches Criminal Probe Into Jerome Powell

The News

The Department of Justice has launched a criminal investigation into Federal Reserve Chairman Jerome Powell.

Powell confirmed the investigation into him in a video statement on Sunday night, saying the Federal Reserve recently received grand jury subpoenas. The investigation is related to testimony he gave to the Senate last year about renovation costs of the Federal Reserve headquarters building in Washington, D.C.

In his statement, Powell called the inquiry “unprecedented,” denying wrongdoing and suggesting it was only opened because of his interest rate decisions, which President Donald Trump has frequently lamented.

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“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”

Shortly after news of the investigation dropped, Sen. Thom Tillis (R-NC) said he will oppose any Fed chair nominees “until this legal matter is fully resolved.”

He also bashed the criminal inquiry as eroding the Federal Reserve’s independence from the White House and calling into question the “independence and credibility” of the DOJ.

What's Next

Powell’s term as Fed chairman is due to expire in May, after which Trump will pick his replacement. But whoever Trump nominates may already be doomed.

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The investigation is the latest into an official who has been a thorn in Trump’s side. Throughout his second term, Trump has targeted Powell for what he sees as a refusal to lower interest rates sooner, frequently dubbing him “Too Late.”

Trump has also slammed the cost overruns of the renovations in a tour of the Fed building last year, claiming they were as high as $3.1 billion. Powell has defended the cost, denying they were as high as Trump claimed they were.

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