Trump's Transparent Persecution of Jerome Powell Is About to Backfire Badly

"The Trump administration served the Federal Reserve with grand-jury subpoenas on Friday, part of a criminal investigation into baseless claims that Chair Jerome Powell lied to Congress about renovations to the Fed's headquarters. As Powell explained after the news broke, these allegations are transparent pretexts for Donald Trump's real motive: coercing the agency into cutting interest rates based on the preferences of the president rather than our best assessment of what will serve the public."

"The probe represents yet another weaponization of the Justice Department's prosecutorial powers to menace perceived political foes. But it is also an astoundingly foolish, self-defeating gambit that is all but guaranteed to backfire badly at the Supreme Court and further frustrate Trump's efforts to take control of the Fed. This investigation is not just legally frivolous; it is a grave tactical blunder that shows exactly why the judiciary must insulate Powell and his colleagues from the president's wrath."

"Since his return to office, Trump has been hammering the Fed to slash ratesto little effect, given the institution's considerable independence from the White House. By law, the president may fire Federal Reserve Board governors only for cause, and no previous president has tried to remove a governor since the Fed's creation in 1913. In August, however, Trump attempted to fire Lisa Cook from the board based on dubious allegations of mortgage fraud. He has also for months been setting the stage to oust Powell, using the Fed's ongoing renovations as a flimsy pretext. It seems pretty clear that if the president is allowed to remove Cook, he will swiftly fire Powell too."

The Trump administration served the Federal Reserve with grand-jury subpoenas alleging that Chair Jerome Powell lied to Congress about Fed headquarters renovations. The investigation functions as a pretext to pressure the Fed to cut interest rates to match presidential preferences. The probe exemplifies use of Justice Department powers against perceived political opponents and is likely to provoke judicial pushback. The tactic is described as legally frivolous and tactically self-defeating, with an expectation of adverse rulings that would protect Fed independence. Statutory protections limit presidential removal of Fed governors to instances of cause, prompting litigation when removal is attempted.

Read at slate.com