federal reserve

When U.S. Federal Reserve Chairman Jerome Powell revealed that he is the target of a criminal investigation by the U.S. Department of Justice (DOJ), a long list of Democrats rushed to his defense — especially Sen. Elizabeth Warren (D-Mass.) — and criticized President Donald Trump's politicization of the Fed. But some conservative Republicans are speaking out as well, including Sens. Lisa Murkowski (R-Alaska) and Thom Tillis (R-N.C.).

Powell's term as Fed chair ends in May, and Trump is hoping to appoint a MAGA loyalist as a replacement. But in a January 11 post on X, Tillis warned that he may oppose Trump's nominee.

The GOP senator posted, "If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question. I will oppose the confirmation of any nominee for the Fed — including the upcoming Fed Chair vacancy — until this legal matter is fully resolved."

In an article published on January 14, Politico reporters Jasper Goodman, Victoria Guida and Jordain Carney stress that Trump's campaign against Powell has become much more than a debate on the Fed chair's performance — it has also become a debate on the role of the Federal Reserve itself.

"The Justice Department's move to investigate Fed Chair Jerome Powell is renewing lawmakers' focus on central bank independence as Trump inches closer to deciding who he wants to nominate as the next Fed chief," the Politico journalists explain. "And that could lead lawmakers to take aim at the frontrunner, National Economic Council Director Kevin Hassett, if he is nominated for Powell's position. Hassett has been a ubiquitous presence on TV, making the case for the president's economic agenda and his repeated calls to cut interest rates…. The new scrutiny on the Fed's political autonomy illustrates how the investigation into Powell could have an impact far beyond its outcome."

Goodman, Guida and Carney add, "The legal clash could disrupt the president's vision for who leads the Fed starting in May. And it could also compel Powell to stay on the Fed board beyond the expiration of his term as chair, depriving Trump of getting a pick for another seat until January 2028."

Tillis is saying that he may voting against Hassett if he becomes Trump's nominee to replace Powell as Fed chair. But a Republican senator, interviewed on condition of anonymity, told Politico that Tillis will likely "fold" if Hassett is nominated — as it would be "too big a deal" if Senate Republicans opposed Trump's Fed chair nominee.

Mark Spindel, chief investment officer at the firm Potomac River Capital, also believes that Hassett would be confirmed.

Spindel told Politico, "Hassett ticks every box that every standard Fed chair or nominee would tick. I still think he will get the president's nomination, and I think the president can work the phones pretty aggressively."

Read the full Politico article at this link.

MS NOW analyst Steve Benen warns President Donald Trump’s latest ploy in his ongoing war against Federal Reserve chairman Jerome Powell now extends to “outlandish” lawsuit threats. But the legal basis of the president’s argument could become a colossal self-own in the U.S. court system if judges take Trump’s argument seriously.

Trump has pressed Powell to counter the damage of Trump’s onerous tariffs by lowering interest rates, and the more Powell disregards him, the angrier Trump gets.

“Indeed, the president has resorted to juvenile taunts and name-calling, publicly condemning Powell as, among many other things, a ‘moron’ for failing to follow the White House’s misguided demands,” said Benen.

Trump said he might also continue his impotent campaign to duck U.S. agency independence clauses and fire Powell, but it is Trump’s recent legal threat that Benen finds most laughable.

“Donald Trump has spent the first year of his second term whining more about Joe Biden than anyone else on earth, but … Powell is a close second,” said Benen. “… During a Mar-a-Lago press conference, standing alongside Israeli Prime Minister Benjamin Netanyahu, Trump peddled familiar complaints, before concluding: ‘It’s gross incompetence against Powell. We’re going to probably bring a lawsuit against him.’”

Trump wrote in August that he was ‘considering allowing a major lawsuit against Powell to proceed,’ and his press secretary insists that he’s ‘serious’ about it, said Benen, while adding that it’s “unlikely that he’ll follow through.”

“But I’m also curious about the implications of such an effort,” said Benen. “If litigants can file civil suits against government officials over perceived ‘gross incompetence,’ wouldn’t that lead to an avalanche of such cases?” said Benen. “Given Team Trump’s brazen and routine incompetence, it isn’t difficult to imagine the president and administration officials facing a whole lot of lawsuits along these lines if he were to open such a door.”

Read Benen's MS NOW column at this link.

President Donald Trump unleashed another attack on Federal Reserve Chairman Jerome Powell, calling for the firing of the independent agency chief who has just months left in his term. Experts this week suggested eroding the Fed’s independence could trigger stagflation.

In a speech at the U.S.—Saudi Investment Forum on Wednesday, President Trump urged his Secretary of the Treasury, Scott Bessent, to “work on” getting Powell to lower interest rates. Experts warn that lowering interest rates inappropriately could lead to even higher inflation.

“He’s got some real mental problems,” Trump told the audience at the Kennedy Center, referring to Powell. “He’s — something wrong with him.”

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“I’d be honest, I’d love to fire his a –. He should be fired. Guy’s grossly incompetent,” Trump charged. “And he should be sued for spending $4 billion to build a little building. I’m building a ballroom that’s gonna cost a tiny fraction of that, and it’s bigger than the whole thing put together.”

Trump was referring to the renovations at the Federal Reserve. The Fed does not rely on tax dollars for its operations.

“You gotta work at him, Scott,” Trump continued from the podium. “The only thing Scott’s blowing it on is the Fed. Because the Fed, the rates are too high, Scott. And if you don’t get it fixed fast, I’m gonna fire your a –, okay?”

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Critics weighed in on Trump’s attack.

“If you are a single-issue ‘affordability’ voter, this should be concerning,” remarked Catherine Rampell, the economics editor for The Bulwark.

Andrew Ackerman, who covers the Fed for The Washington Post, appeared to mock the president: “Trump: I want to fire Jay Powell but Scott Bessent won’t let me.”

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Federal Reserve chairman Jerome Powell – who President Donald Trump appointed to his post during his first term – recently revealed what he tells his colleagues when it comes to the president's constant threats: "Don't engage."

The Daily Beast reported Tuesday on Powell's attitude toward the administration, which he delivered during an event at the Greater Providence Chamber of Commerce Rhode Island. The head of the nation's central bank said that he made sure his fellow Fed governors dismissed any political attempts to influence their work, and to simply stick to their job of managing monetary policy.

“We don’t engage,” Powell said. “We don’t, you know — our argument is [we're] doing our jobs. We don’t get into back and forth with external people. We just do our jobs. We keep our heads down and do our jobs. That’s what we do.”

“We’re based in Washington, D.C., and many, many people you know — Congress, and you know — there are often things seen through a lens of, ‘Is it good for this party or bad, or bad for this party or this politician?” he continued. “We’re just not looking at things that way. We’re looking at what’s the best thing for the people that we serve in the immediate term, what’s the best policy?”

“And no one, many people don’t believe us because they go, ‘Come on, come on, you’re really political,’ but the truth is, mostly people who are calling us political, it’s just a cheap shot," he added.

The Fed chair's remarks come on the heels of its meeting earlier this month, in which the Fed announced it was slightly reducing interest rates by a quarter of a percentage point. Powell insisted that the rate cut was made not because of Trump's persistent requests to cut rates, but simply because the economy needed stimulation after a year of lackadaisical growth, persistent inflation and an unemployment rate on the rise.

Powell has refused on multiple occasions to resign from his position as Fed chair, which expires in May of 2026. His position on the Federal Reserve Board of Governors is slated to end on January 31, 2028. Trump has already appointed one member of the board this term, with former Council of Economic Advisors chairman Stephen Miran being confirmed on a party-line vote just prior to the Fed's September meeting. He's expected to appoint a loyalist to the chair role after Powell's term ends next year.

Click here to read the Beast's full report (subscription required).