Trump Denies Role in Fed Subpoenas; Powell Cites Political Pressure
Overview
President Trump denied any knowledge or direction of the Justice Department's subpoenas targeting Federal Reserve Chair Jerome Powell. Powell, however, warned that the unprecedented legal threat is part of sustained White House pressure. Lawmakers on both sides of the aisle voiced alarm over the potential erosion of the Federal Reserve's independence.
Trump Denies Involvement
President Donald Trump on Sunday stated he had no knowledge of or involvement in the Justice Department's decision to issue subpoenas connected to the Federal Reserve. He explicitly denied directing any such investigation.
"I don't know anything about it," Trump told NBC News, reiterating his criticism of Federal Reserve Chair Jerome Powell's handling of interest rates and economic policy. The comments came after the Justice Department confirmed subpoenas related to Powell's June testimony before the Senate, specifically concerning renovation costs at Federal Reserve office buildings.
Powell Alleges Political Pressure
Federal Reserve Chair Jerome Powell indicated that the Justice Department had raised the possibility of criminal action against him. Powell described this as an unprecedented step for a central bank chair and suggested the legal threat should be viewed within the context of what he termed sustained pressure from the White House.
Powell asserted that no one, particularly the Fed Chair, is above the law. He emphasized that the central bank makes interest rate decisions based on economic conditions, not political preferences, implying the criminal charges were linked to this stance. Trump, however, rejected this interpretation, stating the subpoenas were unrelated to rate policy and that Powell's leadership was detrimental to the economy.
Lawmakers Raise Independence Concerns
The development prompted swift reactions from lawmakers. Republican Senator Thom Tillis of North Carolina, a member of the Banking Committee, declared he would block any further nominations for the Federal Reserve by the Trump administration until the matter is resolved. Tillis wrote on X (formerly Twitter) that any doubt about the administration pushing to end the Fed's independence should now be erased, questioning the credibility of the Department of Justice itself.
Senator Elizabeth Warren of Massachusetts, the ranking Democrat on the committee, accused the administration of misusing federal authority to politically influence the central bank. She alleged that Trump aims to remove Powell and install a new chair to complete a "corrupt takeover" of the central bank, describing the actions as abusive.
Agency Responses
The White House declined to comment, deferring questions to the Justice Department. A DOJ spokesperson stated the agency does not comment on specific cases but is prioritizing investigations into potential misuse of public funds. The Federal Reserve operates through service fees, loans, and investment income, not taxpayer dollars. The U.S. Attorney's office in Washington, which is handling the matter, also declined to comment.
