Powell Under Fire: Trump's Pressure and Fed's Future

Jerome Powell, head of the U.S. Federal Reserve, faces a criminal investigation by the Justice Department over alleged misleading testimony about renovation costs at the central bank’s headquarters. This event marks a significant move in Trump's ongoing campaign to influence Fed policies and could potentially undermine the bank's independence.

Jerome Powell, the chair of the U.S. Federal Reserve, is at the center of a criminal probe by the Department of Justice over allegations he misled Congress regarding the costs of a renovation at the Federal Reserve headquarters. President Donald Trump, though denying direct involvement, has publicly pressured Powell to resign, citing management failures and financial misreporting.

Observers are raising alarms about potential threats to the Federal Reserve's independence, highlighting that Trump's attempts to influence Powell and the Fed could harm trust and stability in the U.S. economic system. The White House has criticized the renovation project for its escalating costs, attributing them to design issues and hazardous material removals.

This investigation follows a broader pattern of the Trump administration's efforts to reshape governmental bodies by exerting pressure on independent institutions. With the Senate Banking Committee divided, the situation could stall future Fed nominations, raising uncertainties in economic policy direction amid concerns over the Fed's autonomy and its future course.

(With inputs from agencies.)