Frustration mounts inside White House over Pirro’s handling of Powell investigation
Frustration is growing within the White House regarding US Attorney Jeanine Pirro's unexpected criminal investigation into Federal Reserve Chair Jerome Powell, which has led to a damage control campaign by the administration. The investigation, which surprised senior officials, challenges President Trump's ability to confirm a new Fed chair that aligns with his economic agenda, as several Republican senators have pledged to withhold support for any nominee while the inquiry remains active. Powell's public acknowledgment of the subpoenas has shifted the narrative, casting the probe as an attempt to manipulate interest rates. This turmoil raises concerns about the independence of the Federal Reserve and could potentially result in Powell extending his tenure beyond his term's conclusion. The aftermath of this situation remains uncertain, with implications for both the Fed's future and Trump's political strategy.
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White House officials were blindsided by the investigation into Powell, leading to urgent efforts to reassure markets and legislators while distancing Trump from the inquiry.
Trump's Treasury Secretary expressed frustration over the investigation, indicating bipartisan criticism from Republican senators, particularly Thom Tillis, who vowed not to support any new Fed chair until the inquiry is resolved.
Powell's statement regarding the subpoenas described the probe as unprecedented, suggesting it was motivated by Trump's desire to influence interest rate decisions.
The investigation's announcement prompted swift backlash, including a collective statement from former Fed chairs and Treasury secretaries decrying the use of prosecutorial actions against the Fed.
The situation has raised speculation about Powell's potential decision to remain at the Fed longer than his term, possibly until 2028, as a response to the investigation.
Pirro's office initiated contact with the Fed prior to the subpoenas, but the investigation's rapid escalation surprised many within Trump's circle, who question the timing and motives behind it.
Trump has previously criticized Powell's performance and pressured the Fed for rate cuts, which fueled the investigation's perception as politically motivated.