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Donald Trump has delivered his strongest defence of the Department of Justice’s criminal investigation into Federal Reserve chair Jay Powell, saying the officials who launched the probe had shown “courage”.
The president heaped praise on US attorney-general Pam Bondi and Jeanine Pirro, the US attorney for the District of Columbia, for opening the investigation this year into Powell over his handling of the $2.5bn renovation of the Fed’s headquarters.
“I want to thank Jeanine Pirro and Pam and her group for having the courage to bring this suit,” the US president said at a cabinet meeting on Thursday.
Trump’s remarks come after a US federal judge blocked subpoenas issued by Pirro’s office, writing in an opinion earlier this month that prosecutors were using their probe to force Powell to “knuckle under” and bend to the president’s relentless calls to slash borrowing costs.
Pirro, an ally of Trump, said she would appeal against the decision.
The DoJ has filed a motion to reconsider Judge James Boasberg’s ruling, claiming it “applied an incorrect legal standard” and included factual errors. The Fed on Wednesday argued in a court filing that the move mischaracterised the judge’s opinion, which it deems “clear and correct”.
The investigation has deepened concerns among investors about the Trump administration’s attack on the central bank’s independence. Powell in January said he believes that the probe is a pretext for White House to press the Fed to cut interest rates.
The probe is also holding up the confirmation of Kevin Warsh — Trump’s pick to replace Powell once the Fed chair’s term expires in mid-May. North Carolina’s Thom Tillis, who sits on the influential Senate banking committee, has said he will block Warsh’s confirmation from a vote on the Senate floor until the probe against Powell is dropped.
Trump on Thursday lambasted Powell for the scale of the Fed’s headquarters revamp, claiming it may not ever be completed.
He said: “I believe that it’s not possible to spend that kind of money — $3bn, $4bn, nobody knows, nobody has any idea what it is — but it’s over $3bn, and it’s probably going to be over $4bn by the time they finish, and it may never get finished — unless I take it over.”
Trump quipped the renovation, which is on track to be completed by the end of 2027, would take so long that they would have to give Warsh an office in the “basement of the ballroom” in the White House.
The president on Thursday labelled Powell a “moron” for not cutting rates amid fears that the Iran war will drive a fresh surge in inflation.
Powell last week said he would remain as Fed chair until his successor is appointed. He also vowed to potentially stay on the central bank’s board as a governor until the probe was “well and truly over, with transparency and finality”. Powell’s term as governor extends to January 2028.
The Fed declined to comment.
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