President Donald Trump isn’t backing down from his criticism of Federal Reserve Chair Jerome Powell, even as an increasing number of fellow Republicans express a desire to cool tensions.
“Well, he’s billions of dollars over budget,” Trump told reporters at the White House Tuesday morning before departing for a trip to Michigan. “So, he’s either incompetent or he’s crooked. I don’t know what he is, but he certainly doesn’t do a very good job.”
On Sunday, Powell released an extraordinary video statement, confirming that he is under a criminal investigation for testimony he gave before Congress about renovations to the Fed’s headquarters. Powell said that the probe was being conducted in retaliation for his repeated defiance of Trump’s wishes regarding the independent central bank’s setting of interest rates.
“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,” Powell said in a nearly two-minute video released by the Fed.
Powell and the Fed have repeatedly denied that there is anything untoward about the cost overruns for the $2.5 billion renovations. In July, Powell accompanied Trump on a tour of the site where the pair sparred in front of reporters about the project.
“You just added in a third building is what that is,” Powell said in July after Trump cited a figure that was higher than other estimates. “It was built five years ago.”
An FAQ on the Fed’s website said the project has been costlier than expected due to a number of factors, including changes to the design, a larger-than-expected amount of asbestos, and the increase in the cost of materials.
Trump told NBC News he had no knowledge of grand jury subpoenas being sent to the Fed. Amid a firestorm, US Attorney for the District of Columbia Jeanine Pirro said that the Justice Department had no alternative but to subpoena the information.
“The United States Attorney’s Office contacted the Federal Reserve on multiple occasions to discuss cost overruns and the chairman’s congressional testimony, but were ignored, necessitating the use of legal process—which is not a threat,” Pirro said in a statement posted on X on Monday night.
In 2017, Trump nominated Powell, who was already a member of the Fed’s Board of Governors, to lead the central bank. Since then, Trump has soured on Powell and at times has mused about firing the Fed chair, though legal experts have disputed whether any president would have the power to do so.
The criminal probe into Powell could prove costly for the White House. Powell’s term as chair is up in May. For months, Trump has conducted a public search for his replacement. In a closely-divided Senate, Trump cannot afford to lose Republican support for any potential nominee.
After Powell’s statement was released, Sen. Thom Tillis, a Republican from North Carolina, said he would not support any Trump nominee until the investigation “is fully resolved.” Tillis serves on the Senate Banking Committee, where Republicans hold a 13-11 majority. If Tillis remained opposed, the committee could deadlock — likely stalling the nomination or, at the very least, requiring Republicans to take the rare step of changing the chamber’s rules.
Beyond Tillis, a handful of other Republicans on Capitol Hill have also decried the criminal probe. All three living former Fed chairs, including Reagan appointee Alan Greenspan, have lined up behind Powell, as have the current leaders of central banks around the world.
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