A federal judge on Friday said he was blocking subpoenas the Department of Justice issued to Federal Reserve Chairman Jerome Powell in an investigation allegedly related to the management of the central bank’s restructuring.
“A large body of evidence suggests that the Government provided these complaints to the Board in order to pressure its Chairman to vote for lower tariffs or to resign,” wrote Judge James Boasberg, chief judge at the US District Court in Washington, DC, in court.
Boasberg continued: “On the other side of the scale, the Government produced overwhelming evidence that Chairman Powell suspected a crime; indeed, your reasons are so flimsy and unsubstantiated that the Court could conclude that it was provocation.”
Therefore, the Court finds that the summons was issued with an improper purpose and will dismiss it,” said the order.
Powell said the threatened lawsuit was related to his testimony before the Senate in June about renovations to the Federal Reserve’s office buildings.
“No one—certainly not the chairman of the Federal Reserve—is above the law,” Powell said in an unprecedented video statement Sunday night on Jan. 11. “But this unprecedented action must be seen in the broader context of the administration’s threats and ongoing pressure.”
The U.S. Attorney for the District of Columbia, Jeanine Pirro, said at a press conference Friday that the judge’s order erroneously acquitted Powell and others.
“No one is above the law, but for the first time the judge’s decision that the grand jury subpoena — on the face of it is legal in all respects — can be ignored, because the judge thinks that the matter is beyond suspicion. This is a decision that is not bound by the law,” he said.
Since before the start of his second term, President Donald Trump wants to lower interest rates and has been attacking Powell and other senior officials of the central bank. The administration has raised criticism that the problem of not being able to buy has hit consumers.
The Fed has cut interest rates three times in the past year.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions – whether instead of monetary policy it will be guided by political pressure or intimidation,” he said.
Powell said in a January video that the focus on his testimony and the headquarters renovation plan, which other administration officials held for the past year, were “reasonable.”
“The threat of criminal charges is the result of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the president’s preferences,” he said.
This investigation has angered members of Congress, chief among them North Carolina Republican Senator Thom Tillis, who said he will block the confirmation of Trump’s nominee to replace Powell, Kevin Warsh, until the investigation is withdrawn.
Shortly after the judge’s order was issued, Tillis wrote in X, “This decision confirms how weak and frivolous the criminal investigation of Chairman Powell is and is nothing more than a failed Fed attack.”
“We all know how this is going to end and the DCUS Attorney’s Office should save itself the embarrassment and move on,” Tillis continued.
He said “passing the decision will delay the confirmation of Kevin Warsh as the next Fed Chairman.”
Pirro, however, insisted that he was not acting under political pressure. “Politics is not the path I am on right now, my job is to present evidence.”
Tillis sits on a key subcommittee whose approval is needed to bring Warsh’s nomination to the full Senate. Tillis reiterated her position earlier this week.
“This terrible decision will be appealed by the United States Department of Justice,” Pirro said. He did not give a timeline.
The Federal Reserve declined to comment on Friday’s judge’s order.
The Fed’s Open Market Committee is scheduled to meet in Washington on Tuesday to consider whether to raise, lower or keep interest rates unchanged.
