Fed Shock: Jerome Powell Faces Criminal Probe as Trump Pressure Boils Over
Good evening. We begin tonight with a stunning and deeply consequential development out of Washington, one that’s already sending ripples through markets and politics around the world.
The chair of the US Federal Reserve, Jerome Powell, says he is now under a criminal investigation by the US Justice Department. That alone is extraordinary. But the timing and the context, are what make this moment so explosive.
Powell revealed that federal prosecutors have issued subpoenas to the Federal Reserve, tied to testimony he gave to a Senate committee last year. That testimony focused on renovations to Federal Reserve buildings. Powell insists he acted properly and he described the investigation as unprecedented.
What’s drawing intense scrutiny tonight is Powell’s claim that this probe is not happening in a vacuum. He says it comes after months of public pressure from President Donald Trump, pressure aimed squarely at forcing the central bank to cut interest rates faster.
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To understand why this matters, it helps to take a step back. The Federal Reserve is designed to be independent from politics. Its job is to manage inflation, employment and financial stability based on economic data, not presidential demands. That independence is considered a cornerstone of the US financial system and a major reason global investors trust the dollar.
Powell has resisted repeated calls from President Trump to slash rates more aggressively, even though the Fed did cut rates several times in the second half of last year. Trump has blamed high rates for economic pain and has openly attacked Powell’s leadership, even threatening to remove him.
Now comes a criminal probe, something critics say risks crossing a dangerous line.
Republican Senator Thom Tillis, who sits on the Senate Banking Committee, says he will block any new Federal Reserve nominees until this legal matter is resolved. Democrats, including Senator Elizabeth Warren, are warning that this could be an attempt to push Powell out and replace him with someone more politically compliant.
The Justice Department has not confirmed the investigation and the White House says it won’t comment. President Trump, speaking briefly to reporters, denied knowing anything about the subpoenas, while still criticizing Powell’s performance.
The stakes here are enormous. If investors begin to believe the Fed can be pressured or punished for its policy decisions, confidence in the US financial system could weaken. That could affect borrowing costs, markets and economies far beyond America’s borders.
For now, Jerome Powell remains in office, but the battle lines are clearly drawn. This is no longer just about one man or one investigation. It’s about whether the world’s most powerful central bank can truly remain independent in the face of political force.
We’ll be watching closely as this story develops.
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