Donald Trump wants Jerome Powell, the head of the Federal Reserve, to do something Powell doesn’t want to do.
Now, Trump’s federal prosecutors are now investigating Powell.
That’s the shortest version of the news story that broke Sunday night, when Powell released an extraordinary statement and video, which I urge you to watch and read for yourself.
Key quote from Powell, who Trump picked as Fed chair in 2017: “This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
(Trump told NBC on Sunday that he didn’t have any knowledge of the investigation and that the DOJ wasn’t trying to pressure Powell into lowering interest rates. If you find that hard to believe, you might point to the fact that the investigation was reportedly authorized by US Attorney Jeanine Pirro, the former Fox News anchor who is a longtime Trump ally.)
As Powell notes, using the threat of a criminal prosecution — fueled by a pretext — to pressure the Fed, which is meant to be independent of the White House but accountable to Congress, is unprecedented.
But the pattern most definitely has precedent in the Trump administration: Trump will say he wants or needs something to happen, often using fantastical logic to justify it — and then uses coercion to try to make it happen.
In this case, it’s about Trump wanting the Federal Reserve to lower rates. And more broadly, about Trump wanting the Federal Reserve to answer to him.
That’s why, prior to investigating Powell, he has also tried to remove Fed member Lisa Cook, a Biden appointee the Trump administration has accused of mortgage fraud. Cook fought Trump in court, and later this month the Supreme Court is scheduled to hear the case — and eventually rule on whether Trump can remove a Fed governor “for cause.”
Trump goes after political enemies
It’s easy to see many other examples of Trump trying the same thing. Trump, for instance, insisted that political enemies like former FBI Director James Comey and New York Attorney General Letitia James should be prosecuted for … something. And when a Trump-appointed prosecutor declined to bring charges, Trump had him replaced with another appointee who would. Both of those cases have been dismissed by a federal judge, who said Lindsey Halligan, the Trump-installed US attorney who brought the cases, had been unlawfully appointed. The DOJ is appealing.
Oftentimes, the reactions to Trump’s pressure campaigns amount to a shrug — Democrats complain, Republicans usually back him (or say nothing), and markets move around a bit before reaching a new equilibrium.
Maybe this time will be different: The Fed is supposed to be an institution that investors care about as a steady, guiding hand that doesn’t swing wildly with political winds. Markets can ignore a lot of political ugliness; pressure on the Fed is harder to dismiss.
The broader pattern Powell is underlining goes well beyond monetary policy or even political score-settling. The administration has repeatedly paired aggressive action with a justification that is often strained at best. Prior to the raid that removed Venezuelan leader Nicolás Maduro this month, Trump and his proxies repeatedly insisted that Maduro and his country were killing countless Americans by bringing fentanyl into the US — which is not true. Last week, Kristi Noem, Trump’s head of Homeland Security, said the shooting of a Minneapolis woman protesting an ICE raid was justified in part because she was a “domestic terrorist.”
Why Trump isn’t done yet
Some of you will look at Trump’s behavior and find something in there that you like, in an ends justify means formulation. Maduro was a terrible leader, so maybe you think that making up reasons to depose him doesn’t matter much. Maybe you like Trump’s deportation agenda, and aren’t worried about him using masked agents with guns on city streets to make that happen.
Give it time. We’re still just a year into the second Trump administration, and his impulse to act without restraint has yet to find real pushback. “My own morality. My own mind. It’s the only thing that can stop me,” he told The New York Times last week, when asked about the relevance of international laws and treaties. A president with an infinite target list and unchecked power is never finished.
