President Donald Trump on Thursday signaled his continued support for a Department of Justice investigation into Federal Reserve Chairman Jerome Powell — a stance that could further delay the confirmation of Powell’s would-be successor, Kevin Warsh.
“He’s under investigation because he’s building a building for hundreds of billions of dollars more than it’s supposed to cost,” Trump said of Powell in the Oval Office.
He was referring to the ongoing renovation of the Fed’s headquarters and another building in Washington, the purported focus of the federal criminal probe of the central bank chairman led by U.S. Attorney Jeanine Pirro. Trump repeatedly claimed that the construction projects cost up to $4 billion, though the actual total is roughly $2.5 billion.
Powell has accused the government of launching the investigation in retaliation for his refusal to lower interest rates as much or as quickly as Trump has demanded.
Powell “should be lowering rates immediately,” Trump said unprompted in his Oval Office remarks, “but he won’t do that because he’s a stubborn, incompetent person, and that’s a bad thing.” Trump spoke to reporters as he sat next to Japanese Prime Minister Sanae Takaichi before a bilateral meeting.
Returning to the subject of the Fed building, Trump claimed the multibillion-dollar price tag of the renovations shows “there is criminality, maybe it’s with the contractor.”
“So all I want to do is bring out to the public that this guy is incompetent, he’s a very incompetent guy, and he may be a dishonest guy,” Trump said.
The Fed declined to comment on Trump’s latest remarks about Powell.
U.S. District Judge James Boasberg, in a scathing ruling last week, blocked subpoenas issued by a Washington grand jury as part of the probe.
“A mountain of evidence suggests that the Government served these subpoenas on the [Fed’s] Board to pressure its Chair into voting for lower interest rates or resigning,” the judge wrote.
Pirro vowed to appeal the ruling, which she called “outrageous.”
Sen. Thom Tillis, R-N.C., has repeatedly vowed to block Warsh’s nomination from advancing through the Senate Banking Committee until the DOJ drops its probe of Powell.
Warsh must get the committee’s approval before the full Senate can confirm his nomination.
Tillis, who is not running for reelection, says he likes Warsh, but argues the probe undermines the Fed’s long-held independence from executive branch interference.
“I have no earthly idea what the market reaction would have been if suddenly the perception is that the Fed chair serves at the pleasure of the President, right?” Tillis said last week.
Powell said Wednesday that he would not leave the Fed’s board of governors until the probe was “well and truly over” with “transparency and finality.”
He also said he has not decided whether to depart before his term as governor ends, even if the investigation is resolved. A reporter’s question about Trump’s thoughts on Powell potentially staying is what prompted the president’s rant.
“I have not made that decision yet,” Powell said. “I will make that decision based on what I think is best for the institution and for the people we serve.”
Powell’s term as Fed chair ends in May, while his term as governor lasts until 2028.
— CNBC’s Alex Harring contributed to this report.
