Donald Trump’s Department of Justice has opened a criminal investigation into the chair of America’s Federal Reserve.
In a chilling video, Jerome Powell, who has worked at the Reserve since 2012, shared that the agency has been served with subpoenas and threatened with criminal indictments over his Congressional testimony regarding renovations to the building.
Powell said he thinks the investigation was opened by Trump after he refused to cut interest rates – a move which Trump wanted, but one that The Reserve avoided based on their independent assessment of what is best for America.
‘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…Those are pretexts,’ Powell said.
‘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.
After Powell released his video statement, Trump claimed he had not known about the indictments, but took a chance to make a dig at Powell.
‘I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,’ Trump said.
The indictments have suggested Powell lied to Congress last summer about the construction and has gone far over budget for the renovations by around $600 million.
Trump has also alleged that the renovations include ‘VIP rooms, rooftop gardens’ and more – something Powell has outright denied on multiple occasions.
The suggestion that Trump opened the investigations to pressure Powell into making financial decisions based on his opinions goes against one of the central tenets of America – the independence of central banks.
One historian said the investigation into Powell is a ‘low point in Trump’s presidency and a low point in the history of central banking in America.’
Some Republicans who have been aligned with Trump in most of his decision-making have also spoken out against the investigation.
Senator Thom Tillis, from North Carolina, once a staunch Trump supporter, wrote on X: ‘If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none.
‘It is now the independence and credibility of the Department of Justice that are in question.’
It’s not the first time that Powell and Trump have had minor spats. Five months ago, when touring the Federal Reserve as it was undergoing renovations – those that are now under an investigation – the pair clashed.
‘It looks like it’s about $3.1 billion, went up a little. Or a lot. So it was $2.7 billion, it’s now $3.1 billion,’ Trump said, as Powell stood next to him, shaking his head.
‘I’m not aware of that, Mr President,’ he said. ‘I haven’t heard that from anyone.’
Trump claimed the figures had ‘just come out’, before he was corrected by Powell, who said he had mistakenly included the costs of a building which was constructed five years prior.
He also smacked Powell’s back, telling reporters he’d love him to ‘lower interest rates’.
Americans rush to buy gold in the wake of Powell’s announcement
The price of gold has soared to a new record high as concerns about fresh threats to the independence of the US central bank fuel demand.
Rising gold prices typically indicate that investors are seeking out ‘safe-haven’ assets, which carry less risk than other traditional investments, such as stocks and shares.
Gold prices have shot up by about 70% over the past year, strengthening against broader economic and political uncertainty.
The news regarding Powell has stoked fears that threats to the independence of the central bank were becoming more severe.
Susannah Streeter, chief investment strategist at Wealth Club, said Wall Street has been ‘rattled by what’s being viewed as another assault on the independence of the US Federal Reserve’.
‘It certainly marks a sharp escalation in the Trump administration’s criticism of the Fed and is unnerving investors, given that an independent central bank is considered to be crucial to maintaining sound monetary policy, especially at a time when the mounting US debt pile is coming under scrutiny,’ she said.
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