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Trump’s campaign of distraction and personal retribution escalated over the weekend, as Federal Reserve chair Jay Powell was served with grand jury subpoenas from the Justice Department threatening criminal prosecution. The investigation is being run by Trump’s close ally, the U.S. attorney for the District of Columbia, Jeanine Pirro.
The pretext for the threats is congressional testimony by Powell challenging Trump’s bogus claims of wrongdoing in connection with cost overruns in the renovation and expansion of Federal Reserve headquarters. In a brief interview with NBC News on Sunday, Trump dissembled when asked if he was aware of the subpoenas. But it is wildly improbable that Pirro and Trump did not coordinate this latest attack on Powell.
This time, Trump may have met his match. When Trump first raised the allegations, Powell deftly invited the president to the Fed to see the construction for himself. In July, Trump walked into the trap, had a cordial conversation with the Fed chair, and backed off.
But Powell’s refusal to cut interest rates as deeply as Trump wants and his defense of the Fed as an independent institution have continued to rankle. Last month, Trump threatened to sue to have Powell removed “for incompetence,” a preposterously hollow threat.
Now Powell, ordinarily circumspect and technocratic, is fighting back. In a remarkable public statement by video Sunday night, the Fed chair said:
This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings … 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.
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.
I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. 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 has also taken the step of hiring the blue-chip law firm Williams & Connolly as outside counsel. The Supreme Court blocked Trump’s earlier effort to fire Fed governor Lisa Cook on bogus charges. It is hard to imagine any court convicting Powell. |
