Donald Trump does not ease his pressure on the Federal Reserve (Fed) chairman, Jerome Powell. The U.S. president assured this Wednesday that he will fire him if he does not leave his position in May. “Then I will have to fire him,” said the Republican in an interview on the conservative channel Fox News, when asked if he intended to remove him from his post. “I have wanted to fire him, but I hate controversy. I want to avoid controversy,” he assured.
Jerome Powell’s term as head of the U.S. central bank officially ends next May 15. Trump named Kevin Warsh as his replacement, but he still has to pass the Senate filter. Senators from the Senate Banking Committee, the commission that must vote on Warsh’s nomination, have warned that they will oppose it as long as the criminal investigation by the prosecutor’s office against Powell remains open. The federal prosecutor for the District of Columbia, Jeanine Pirro, is investigating him for the cost overruns of the headquarters renovation, a case that most attribute to White House pressure against the Fed chairman.
The Republican leader assured during the Fox interview that he will maintain the investigation against Powell. “Does that mean we are going to stop the investigation of a building that I would have done for 25 million dollars and that will perhaps cost 4 billion? Don’t you think we have to find out what happened there?” he said. “I have to find out.” The real estate developer turned politician harshly criticized Powell, whom he called a “disaster” for the country for not listening to him and lowering rates more aggressively.
“Here we have a man who took this small building and a couple more complexes, and is spending more than 3 billion dollars. I want to know who the contractor is, because that contractor is making billions of dollars, maybe,” he emphasized, while pointing at Powell. “He is probably corrupt, but what he really is is incompetent, and we have to prove that incompetence.”
Although Powell’s term as Fed chairman ends in May, his position as a member of the central bank’s board ends in 2028. So he could remain at the Fed beyond May, a possibility he did not rule out: “I will stay until my successor is confirmed. That is what we have done on other occasions,” he said a month ago at the Fed’s last board meeting. “If my successor is not confirmed at the end of my term as chairman, I would serve as chairman pro tempore until confirmed. That is what the law requires,” he insisted.
The prosecutor’s office visits the works
Trump’s latest attack on Powell coincides with a visit by a group of prosecutors from the U.S. federal prosecutor’s office, led by Jeanine Pirro, to the renovation works of the Federal Reserve headquarters in Washington.
The surprise visit was confirmed by a spokesperson from Pirro’s office and reported by The Wall Street Journal. The prosecutors tried to access the premises after speaking with construction workers, but were informed that they could not enter without prior authorization and were given contact information for the institution’s legal team, according to this U.S. newspaper.
The Department of Justice launched a criminal investigation in January against Powell for his management of the renovations and for the testimony he gave last summer before Congress about the works. The investigation targets the cost overruns of the renovation of two historic Federal Reserve office buildings, a project whose initial budget was 2.5 billion dollars. However, the cost has soared to 3.1 billion due to construction difficulties in the basement and parking areas, which have suffered leaks due to their proximity to the Potomac River, and various expansions to connect the two Federal Reserve buildings.
“A project with cost overruns close to 80% compared to the initial budget deserves a serious review,” Pirro said in a statement. “And these are the people responsible for monetary policy in the United States,” she added.
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The prosecutor’s investigation of Powell is interpreted as a pressure method to make him resign or comply with Trump’s wishes to accelerate the rate cuts. The U.S. president launched a smear campaign against the Fed chairman, with insults, disparagements, and threats of dismissal. After receiving the first subpoena from the prosecutor’s office last January, Powell published an unusual video linking his case to political persecution. “The threat of criminal charges is because the Federal Reserve sets interest rates based on our best assessment of what will benefit the general interest, rather than following the president’s preferences,” he stated.
The White House’s pressure on the central bank has also affected other members. Trump is trying to colonize the institution to lower financing costs so the economy grows more when there are barely seven months left until the midterm elections, in which the president stakes much of his power.
Trump’s strategy has had the opposite effect to what was desired. It has sparked a wave of support for Powell from economic, political, and social sectors. The living former Fed presidents have publicly supported him, as well as Democrats in the Capitol and even several Republican senators.
Formal protest
The Federal Reserve’s external lawyer, Robert Hur, formally protested the visit in a letter addressed to the prosecutor’s office. In it, he recalled that last month a federal judge annulled two subpoenas issued against the central bank, considering that the investigation seemed aimed at “harassing and pressuring” Powell to comply with President Donald Trump’s desire to lower interest rates or leave office. “If you wish to challenge that conclusion, you must do so through the appropriate judicial channels,” Hur wrote. “It is not appropriate to try to circumvent it.” In the same letter, he asked the prosecutor’s office not to attempt to communicate with the Federal Reserve outside the presence of its lawyers.
According to Hur, prosecutors Carlton Davis and Steven Vandervelden showed up at the site without prior notice, requested a visit, and said they wanted to check the progress of the project. Both were accompanied by an agent from the criminal investigations unit of the Washington federal prosecutor’s office.
Trump has intensified his attacks on Powell over interest rate policy in recent months and has publicly praised Pirro for investigating the Federal Reserve. The president visited the works with Powell last summer and then downplayed the cost overruns. However, he has recently criticized them again and hinted that the project’s contractor has become extraordinarily wealthy.
Since her appointment as federal prosecutor in Washington last May, Pirro has stood out for promoting investigations against political targets close to Trump. Last January, when her office issued subpoenas against the Federal Reserve, she personally informed the president of the decision.
