Federal Reserve Chairman Jerome Powell took a defiant stance Sunday after federal prosecutors opened a criminal investigation into his renovation of the Central Bank’s headquarters.
Powell, 72, released a rare video message after the Department of Justice served the Federal Reserve with grand jury subpoenas last week. The New York Times reported that the U.S. Attorney’s Office for the District of Columbia has opened a probe that includes a review of Powell’s public statements and an examination of spending records, marking the latest legal action targeting a high-profile Trump foe.
“I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law,” he said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
“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,” he went on. “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.”
Trump and his budget chief, Russell Vought, fixated on the renovation of the Fed’s Washington, D.C. headquarters last year, claiming that the “ostentatious” project failed to comply with government oversight regulations. The 79-year-old president also branded Powell as “Too Late” for his impatience with the Fed’s rate cuts.
“Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people,” Powell said. His term ends in May.
The White House referred the Daily Beast to the Justice Department, which did not immediately return a request for comment.
The feud over the Central Bank’s headquarters stems from a $2.5 billion renovation project that the Fed said involves “a complete overhaul and modernization” that preserves two historic buildings, which have not been renovated since they were constructed in the 1930s.
In July, Trump and Powell put on white hard hats to visit the construction site, where they bickered in front of the cameras about the cost of the project. Trump claimed that the total cost had gone up to $3.1 billion, prompting Powell to shake his head. The Fed chair later had to explain that the numbers the president was referring to included the costs for a building that had already been completed years earlier.
But that’s not where Trump’s grievances against Powell end. The president repeatedly fired shots at Powell over the past year, blasting him as “incompetent” for not slashing interest rates soon enough amid rising inflation and the administration’s sprawling trade war.
Trump also amped up his campaign against the Fed by announcing in August that he was terminating Lisa Cook, the first-ever Black woman to serve as a Central Bank governor.
Presidents can only remove Fed officials for “cause,” which is widely understood to mean malfeasance or neglect of duty. Cook shot back by suing Trump and Powell over the “unprecedented and illegal” move. Supreme Court arguments for Cook’s case are scheduled for Jan. 21.
It remains to be seen whether the probe into Powell will hold up in court. Cases against New York Attorney General Letitia James and former FBI Director James Comey failed last year after a judge threw them out, ruling that they were unlawful because the U.S. attorney who filed them—beauty queen and former Trump lawyer Lindsey Halligan—was appointed illegally.
Regardless of the president’s contempt for Powell, the public is generally pleased with the Fed chairman’s performance. A Gallup poll conducted in December found that Powell had a 44 percent approval rating while Trump garnered 36 percent.
Trump told the Times last week that he had already decided on Powell’s successor. He previously named two Kevins as frontrunners: former Federal Reserve Board of Governors member Kevin Warsh and National Economic Council Director Kevin Hassett.
