A U. S. District Judge has blocked the Justice Department's subpoenas against Federal Reserve Chair Jerome Powell, calling the investigation a pretext to pressure the Fed to lower interest rates. Judge James Boasberg of the District Court for Washington, D. C., criticized the Justice Department for having "essentially zero evidence" of any wrongdoing by Powell. The ruling, unsealed Friday, marks a significant setback for U. S. Attorney Jeanine Pirro, who said the Justice Department would appeal the decision.
The investigation, initiated in January, centered on whether Powell misled Congress last June regarding the $2.5 billion renovation of the Federal Reserve's headquarters. Critics, including former President Donald Trump, questioned the rising costs and amenities of the project. Judge Boasberg noted that Trump and his deputies have made over 100 statements attacking Powell and pressuring him to lower interest rates. He stated there was "abundant evidence" the subpoenas were meant to "harass and pressure Powell either to yield to the President or to resign".
Powell, in an unprecedented video statement in January, characterized the investigation as an attack on the Fed's independence. He argued that the probe was retaliation for the Fed setting interest rates based on the public's best interest, rather than following the President's preferences. Senator Thom Tillis has stated he will block the confirmation of Kevin Warsh, Trump's nominee to replace Powell, until the investigation concludes.
The ruling has sparked considerable debate, with Pirro blasting the judge for neutering the grand jury's ability to investigate crime and leaving Powell "bathed in immunity". Meanwhile, others have lauded the decision as a defense of the Fed's independence from political pressure.
