ByWASHINGTON — A federal judge blocked the Trump administration’s subpoenas to probe the Federal Reserve and Chair Jerome Powell, pointing to “a mountain of evidence” that President Donald Trump is using the investigation to force lower interest rates, according to an order unsealed Friday.
In a scathing 27-page order issued Wednesday, Chief Judge James Boasberg for the U.S. District Court for the District of Columbia wrote there is “abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair.”
In explaining his rationale for granting the Federal Reserve Board of Governors’ motion to quash the subpoenas, Boasberg added, “For years, the President has publicly targeted Powell because the Fed is not delivering the low rates that Trump demands.”
On more than 100 occasions, Boasberg wrote, Trump or “his deputies” made statements attacking Powell. The judge detailed more than a dozen of Trump’s posts on his platform, Truth Social, in which he namecalls Powell and demands his resignation.
Boasberg also invoked the Trump administration’s attempts to criminally prosecute former FBI Director James Comey and New York State Attorney General Letitia James.
“Being perceived as the President’s adversary has become risky in recent years,” Boasberg wrote.
Boasberg wrote later in the order that he would also unseal the Fed Board’s motion to quash the subpoenas and the government’s opposition, as Department of Justice officials had already revealed details about the probe.
The government “has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual. The Court therefore finds that the subpoenas were issued for an improper purpose and will quash them,” Boasberg concluded.
Prosecutor blasts ruling
In a brief press conference Friday afternoon during which she became combative with journalists, U.S. Attorney for the District of Columbia Jeanine Pirro slammed Boasberg’s decision as “outrageous” and said the administration plans to appeal.
“One of the age-old tools that all prosecutors have to investigate any crime, including cost overruns, is a grand jury subpoena. Today, however, in Washington, an activist judge has taken that tool away from us by inserting himself and preventing the grand jury from even obtaining, let alone hearing, evidence,” Pirro said.
“He has neutered the grand jury’s ability to investigate crime. As a result, Jerome Powell today is now bathed in immunity, preventing my office from investigating the Federal Reserve. This is wrong, and it is without legal authority,” she said.
Investigation launched in January
Department of Justice officials served the central bank with grand jury subpoenas in mid-January as part of a probe into multi-year renovation costs at the Fed’s offices in Washington, D.C., and whether Powell lied about it to Congress in June.
The subpoenas prompted a rare video statement from Powell, who alleged the subpoenas were not about construction cost oversight, but about the Fed’s independence to set interest rates.
Powell’s term as chair expires in May.
To replace him, Trump has nominated bank executive and former Fed Board Governor Kevin Warsh, who will need the support of all Republicans on the tightly divided Senate Banking Committee to reach a full Senate floor vote.
Retiring Sen. Thom Tillis, R-N.C., who sits on the committee, has said he’ll refuse to back Warsh until the administration drops its criminal probe of Powell.
“This ruling confirms just how weak and frivolous the criminal investigation of Chairman Powell is and it is nothing more than a failed attack on Fed independence,” Tillis said in a statement Friday.
“We all know how this is going to end,” he continued. “The U.S. Attorney’s Office should save itself further embarrassment and move on. Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair.”
Trump nominated Powell for the role during his first term, and President Joe Biden re-nominated him in 2021.The Senate overwhelmingly confirmed his appointment on both occasions.
