Prosecutors Open Inquiry Into Fed Chair Jerome Powell as Trump Steps Up Pressure

Federal prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome H. Powell over renovation work at the central bank’s headquarters, a move that marks an escalation in President Trump’s months‑long campaign to pressure the Fed to cut interest rates. The inquiry is being overseen by a longtime Trump ally.

Mr. Trump has publicly attacked Powell for months, calling him a “clown” and other insults, and sent a handwritten note urging large rate cuts. The investigation is reportedly into whether Powell lied to Congress about the scope of the renovations. Powell, in a rare video statement, called the inquiry “unprecedented” and warned it raised questions about whether “monetary policy will be directed by political pressure or intimidation.” Mr.

Trump told NBC News the investigation did not concern interest rates. Analysts and scholars quoted in the Times note that the Fed’s decisions reverberate globally: the dollar’s role in global trade and finance, and the Fed’s function as a lender of last resort to other central banks, mean changes in U.S.

monetary policy can have wide effects. Markets reacted poorly after news of the inquiry — stocks, the dollar and U.S. government bonds wobbled and the price of gold set a fresh record. Some academics have also questioned aspects of the Fed’s structure and priorities, while others warn that politicizing monetary policy has produced damaging outcomes elsewhere, citing Turkey’s experience and its high inflation.

Key Topics

Politics, Jerome Powell, Federal Reserve, Donald Trump, Federal Prosecutors, U.s. Dollar