Late last month, Layla A. Jones wrote a piece for us detailing the ways in which Trump’s attack on Jerome Powell had “backfired royally.” It’s only gotten worse since then.
You likely know at least part of this story. When we last wrote, Trump’s DC U.S. Attorney’s office, led by Jeanine Pirro, had a fine excuse to put its investigation into Powell on ice — a fact not lost on Republicans in Congress. Pirro’s subpoenas of the Fed were quashed by James Boasberg, the chief judge of the U.S. District Court for the District of Columbia, in March, with Boasberg finding that the government “produced essentially zero evidence to suspect Chair Powell of a crime”; this month, he declined to reconsider that decision. The DOJ has 30 days to appeal, and it has not yet done so. That suggested, for a time, that Pirro might be prepared to chill.
It would make sense to do so, if only for the sake of appearances and political expediency: Trump’s nominee for Fed chair, Kevin Warsh, is stuck as GOP senators express their concerns about the president’s attacks on the Fed and on Powell personally. Outgoing-Sen. Thom Tillis (R-NC), a key vote on the Senate Banking Committee, has been particularly outspoken. “We all know how this is going to end and the D.C. U.S. Attorney’s Office should save itself further embarrassment and move on,” he said following Boasberg’s second decision. “Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair.”
But this administration is never one to back away from a fight. Earlier this week, investigators showed up at the Fed building and were turned away. Robert Hur — the former special prosecutor who looked into Joe Biden’s handling of classified documents, now outside counsel to the Fed — blasted the visit as inappropriate in a letter shared with news outlets. Tillis, who has pledged not to confirm a new Fed chair while the investigation into Powell is ongoing, responded to news of the investigators’ surprise visit by tweeting a picture of the three stooges. Dialing things up further, Trump reacted to the prospect that Powell would continue on the Fed board after his term as chair is up by threatening to fire him.
And so that all gets us to today. Warsh’s confirmation hearing before the Banking Committee is next week.
The backdrop here is an economy plunging further into uncharted territory amid cost pressures stemming from Trump’s Iran war and a GOP that would surely like to convince itself the president is not attempting to strip the Fed of its unique independence, if only he would let it. “The president wants a different Fed chair. And we want to help him get there,” Sen Mike Rounds (R-SD) told Politico this week. “But that requires right now that they resolve the issue surrounding this prosecution that is still taking place.”
Layla will be covering Tuesday’s hearing for us.
