Trump Escalates Against Powell: Threat of Criminal Charges

SadaNews - The administration of U.S. President Donald Trump has intensified its campaign against Federal Reserve Chairman Jerome Powell, threatening to bring criminal charges against him over statements he made before Congress regarding a renovation project for a Federal Reserve building, which Powell described as a "pretext" aimed at pressuring the central bank to significantly lower interest rates as desired by Trump.

This move represents the latest phase in a long-standing struggle in which Trump seeks greater control over the Federal Reserve, triggering immediate repercussions in Washington.

Republican Senator Tom Tillis, a member of the Senate Banking Committee responsible for reviewing nominations for the Federal Reserve's presidency, expressed that the threat of charges calls into question the "independence and credibility" of the U.S. Department of Justice, asserting that he would oppose any future nominations from Trump for the central bank until this legal issue is fully resolved.

The matter arises against the backdrop of the independence of the U.S. central bank, which is considered the most important globally in shaping monetary policy, designed to be able to set interest rates without direct influence from elected politicians, who typically seek to facilitate borrowing to enhance their political popularity.

Powell has been the chairman of the Federal Reserve since his appointment by Trump in 2018, and he is set to complete his current term in May, but he is not obligated to leave. Several analysts believe that the recent administration's move could increase the chances of Powell remaining in his position despite the pressures.

This development came about two weeks before Trump attempted to oust another Federal Reserve member, Lisa Cook, whose case will be heard by the Supreme Court. The move was met with a cautious reaction from Wall Street, as markets closely monitor Trump's conflict with the Fed since his election for a second term in November 2024, with promises to improve the purchasing power of Americans following a wave of high inflation.

Powell stated that the Department of Justice had delivered subpoenas to the Federal Reserve from a grand jury, threatening criminal charges related to his testimony before the Senate Banking Committee last summer, affirming his deep respect for the rule of law and that the Fed chairman is not above the law, but he considered this step part of an ongoing pressure campaign to lower interest rates and give the administration greater leverage over the bank.

In response, Trump told NBC, "I’m not aware of the Justice Department actions, adding: "I don't know anything about that, but it's certainly not good at the Federal Reserve, and it's not good for building buildings."

The Department of Justice stated that the attorney general directed U.S. attorneys to intensify investigation into any potential abuse of taxpayers' funds, but it declined to comment directly on the case.

Peter Conti-Brown, a historian at the Federal Reserve at the University of Pennsylvania, described the investigation into Powell as a "low point in Trump's presidency and a low point in the history of U.S. central banking," asserting that the Federal Reserve was not designed to reflect the daily volatility of the president and that using criminal law against its chairman represents an unprecedented escalation.