Judge blocks subpoenas against Fed Chair Jerome Powell

A federal judge on Friday said he was blocking subpoenas that the Justice Department served to Federal Reserve Chair Jerome Powell in a probe purported to be about the management of the central bank’s renovation.

“A mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning,” Judge James Boasberg, the chief judge on the U.S. District Court for Washington, D.C., wrote in a court filing.

Boasberg continued: “On the other side of the scale, the Government has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual.”

“The Court therefore finds that the subpoenas were issued for an improper purpose and will quash them,” the order states.

Powell said the threatened indictment was related to his testimony before the Senate in June about the renovation of Federal Reserve office buildings.

“No one—certainly not the chair of the Federal Reserve—is above the law,” Powell said in an unprecedented Sunday night video statement on Jan. 11. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”

Since before the start of his second term, President Donald Trump has demanded lower interest rates and has routinely attacked Powell and the central bank’s other top officials. The administration has ramped up that criticism as an affordability crisis hit consumers.

The Fed cut interest rates three times last year.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation,” he said.

Powell said in the January video that the focus on his testimony and the headquarters renovation project, which some administration officials seized on last year, were “pretexts.”

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” he said.

The probe has infuriated members of Congress, chief among them North Carolina Republican Sen. Thom Tillis, who said he will block the confirmation of Trump’s nominee to replace Powell, Kevin Warsh, until the probe is dropped.

Tillis sits on a key subcommittee whose approval is necessary to bring Warsh’s nomination to the full Senate. Tillis reiterated his position earlier this week.