President Donald Trump on Thursday signaled his continued support for a Justice Department investigation of Federal Reserve Chairman Jerome Powell — a stance that could further delay the confirmation of his would-be successor, Kevin Wersh.
“He’s under investigation because he’s building a building hundreds of billions of dollars more than anticipated,” Trump said of Powell in the Oval Office.
He was referring to the ongoing renovation of the Fed’s headquarters in Washington, the alleged focus of a federal criminal investigation into the central bank’s chairman led by U.S. Attorney Jeanine Pirro.
Powell has accused the government of launching the investigation in retaliation for the government’s refusal to lower interest rates as quickly or as quickly as Trump has demanded.
“Powell should lower rates immediately,” Trump said without prompting in his Oval Office remarks, “but he won’t do that because he’s a stubborn, incompetent person and that’s a bad thing.”
Returning to the subject of the Fed building, Trump claimed that the billion-dollar price tag for the renovation shows that “there is criminality, probably with the contractor.”
“So I want to make it clear to the public that this man is incompetent, he is a very incompetent man and he may be a dishonest man,” Trump said.
U.S. District Judge James Boasberg, in a tough ruling last week, blocked the subpoena issued by a Washington grand jury as part of the investigation.
“An overwhelming amount of evidence shows that the government served these subpoenas on the (Fed’s) board to pressure its chairman to vote lower interest rates or to resign,” the judge wrote.
Pirro vowed to appeal the decision, which he called “outrageous”.
Sen. Thom Tillis, R-N.C., has repeatedly vowed to block Wersh’s nomination from moving through the Senate Banking Committee until the DOJ closes its investigation of Powell.
Warsh must receive committee approval before his nomination can be confirmed by the full Senate.
Tillis, who is not running for re-election, says he likes Warsh, but argues that the investigation undermines the Fed’s long-standing independence from interference by the executive branch.
“The reason I came out so strongly so early is because I believe that we, I, have no earthly idea what the market reaction would be if suddenly the perception is that the Fed chairman acts at the will of the president, right?” Tillis said last week.
Powell said Wednesday that he would not leave the Fed’s Board of Governors until the investigation is “well and truly concluded” with “transparency and finality.”
He also said he has not decided whether to depart before his term as governor ends, even if the investigation is resolved.
“I haven’t made that decision yet,” Powell said. “I will make that decision based on what I feel is best for the institution and the people we serve.”
Powell’s term as Fed chair will end in May, while his term as governor will last until 2028.