From Bloomberg:
Federal Reserve Chair Jerome Powell said the US central bank had been served grand jury subpoenas from the Justice Department threatening a criminal indictment, a dramatic escalation of the Trump administration’s attacks on the Fed.
…
In an interview with NBC News on Sunday, Trump denied having any knowledge of the DOJ’s investigation into the central bank.
The US dollar weakened on the news, falling against all its major counterparts, while gold extended gains to a record high. Futures on the S&P 500 Index fell 0.3%.
Powell said the Fed was served the subpoenas on Friday. The unprecedented move by the Trump administration marks an escalation of President Donald Trump’s longstanding feud with the Fed chair.
Chairman Powell’s response is here. The most concise explanation for these events:
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; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. 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.
The prosecutor will be Fox News commentator Jeanine Pirro, who couldn’t indict a ham sandwich — as she demonstrated recently. So I doubt this indictment will go far. But now that Trump has shown his cards, he leaves Powell no other choice.
I’ll repost what I put in a previous post:
Powell really has the opportunity to stick it to Trump, and he really should do so to preserve the independence of the Fed. While Powell’s term as Chairman expires in May, his seat on the Board of Governors does not expire until 2028. So Powell could remain on the Board after his Chairmanship expires. Since the new chairman must be a member of the board, it means that there would be no vacant seat for Kevin Hassett and thereby making him ineligible for the chairmanship.
I suppose Miran could resign and Hassett take his seat and then the chairmanship, but then that reduces the number of Trumpists on the board. Trump would get Miran or Hassett but not both.
One would hope that this deliberate provocation would blow up in Trump’s face. Powell should clearly see now that he needs to keep his board seat for the good of the country. At least until the mid-terms or maybe until 2028. Sorry Jerome, you were probably anticipating a well-deserved retirement, but you can’t do it right now.