Fed Chair Jerome Powell Facing Criminal Charges From Trump’s DOJ as a ‘Consequence’ for Interest Rates

(AP Photo/Alex Brandon)

Federal Reserve chair Jerome Powell is facing a criminal investigation from President Donald Trump’s Justice Department over the multi-year renovation of the Fed building, The New York Times reported on Sunday evening.

Shortly before the NYT report was published, Powell released a two-minute video where he said the probe was due to his unwillingness to lower interest rates, not the renovation.

Powell described it as a “consequence” of not adhering to the president’s demands to lower rates. He also said the DOJ served the Federal Reserve with grand jury subpoenas on Friday over his testimony to the Senate Banking Committee last year on the renovation project.

Trump has routinely bashed Powell for not moving quickly enough in his view to cut rates and has branded him with the nickname “Too Late.”

Here is the how the NYT reported the news:

The U.S. attorney’s office in the District of Columbia has opened a criminal investigation into Jerome H. Powell, the Federal Reserve chair, over the central bank’s renovation of its Washington headquarters and whether Mr. Powell lied to Congress about the scope of the project, according to officials briefed on the situation.

The investigation was spearheaded by Jeanine Pirro and included an analysis of Powell’s “public statements and an examination of spending records,” NYT reported.

Powell said in his video that the criminal probe had nothing to do with the Fed renovation.

He said:

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’s announcement and the NYT report come after President Trump told reporters in late December he was considering suing Powell for “gross incompetence.”

The president said he was aiming to sue Powell because the cost of renovating the Fed building had gotten out of control. Trump said the cost was north of $4 billion now — about $1.5 billion more than projected.

“It’s going to end up costing more than $4 billion — $4 billion! It’s the highest price of construction,” Trump said. “Again, Democrats — highest price of construction per square foot in the history of the world. Gorgeous monuments are built for a much smaller price. So we’re thinking about bringing… what’s called [a] gross incompetence lawsuit.”

Trump said it was only right, considering the project was Powell’s “baby.”

The three major indices — the S&P 500, Nasdaq, and Dow Jones — were all down between 0.33% and 0.67% in overnight futures, soon after the Powell news came out.