DOJ opens criminal investigation into Federal Reserve and Powell

The Department of Justice served the Federal Reserve with grand jury subpoenas on Friday, threatening a criminal indictment over Fed Chair Jerome Powell’s Congressional testimony last summer, Powell said Sunday. The testimony was about the Fed’s $2.5 billion renovation of its D.C. headquarters, but Powell said in a video released on the Federal Reserve website that concern about the renovation was just a pretext.

“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. 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,” Powell says in the video.

The subpoenas are the latest move in the Trump administration’s pressure campaign to get Powell to lower interest rates, resign or be fired.

Powell noted Sunday that he has served at the Fed under four administrations and would “continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”

Trump started demanding that Powell lower interest rates soon after the inauguration and in July told GOP lawmakers that he would “likely” fire him soon. He soon walked back that statement and has focused on finding a reason to fire Powell “for cause,” focusing on the renovation of the Federal Reserve building.

Trump has also gone after Fed governors, attempting to fire Fed Governor Lisa Cook in August, accusing Cook of mortgage fraud. The DOJ opened an investigation into Cook in September over those allegations but Cook sued and a federal judge sided with Cook, saying that the DOJ had not met the standard for sufficient cause. After a federal appeals court agreed with the first judge’s ruling, Trump then asked the Supreme Court to uphold Cook’s firing. The Supreme Court will hear the case on Jan. 21.

Under the Trump administration’s pressure campaign, Fed Governor Adriana Kuglar resigned in August and Fed Governor Raphael Bostic announced in November that he would retire at the end of his term in February. President Trump nominated his top economic advisor, Stephen Miran to fill Kuglar’s seat.

Find an updated list of article on Trump’s battle with the Federal Reserve here.