Trump Launches Criminal Probe Into Fed Chair Powell as MAGA Pushes for Lower Rates
Updated
Updated · Jacobin magazine · May 28
Trump Launches Criminal Probe Into Fed Chair Powell as MAGA Pushes for Lower Rates
11 articles · Updated · Jacobin magazine · May 28
Trump has opened a criminal investigation into Federal Reserve Chair Jerome Powell, escalating a pressure campaign against the central bank after installing Kevin Warsh to lead it.
The move is tied to Trump's demand for lower interest rates and cheaper federal borrowing, but the broader objective is greater White House control over the Fed's balance sheet and regulatory powers.
The report says Trump has already placed MAGA loyalist Stephen Miran and sought to remove Governor Lisa Cook, framing the Powell probe as part of a wider effort to bend monetary policy to executive priorities.
That fight is unfolding amid a cost-of-living crisis and distrust of central banks after years of market backstops, asset-price support and rate hikes that critics say worsened inequality and household strain.
The broader warning is that weakening Fed independence could let future bailouts and credit decisions serve political patronage, not just financial stabilization, as new economic shocks build.
Can a new Fed chief reverse the policies that have widened the global wealth gap?
Can the Fed unwind its multi-trillion dollar balance sheet without triggering a new financial crisis?
Are independent central banks a failed experiment in a world demanding more democratic control?
The 2026 Criminal Investigation into Jerome Powell: How Political Pressure Threatened the Federal Reserve’s Independence
Overview
In early 2026, the Department of Justice launched a criminal investigation into Federal Reserve Chair Jerome Powell, focusing on cost overruns from a major renovation at the Fed’s headquarters. President Trump had publicly criticized Powell over these costs and pushed for lower interest rates, leading many—including Powell—to believe the probe was politically motivated. The investigation became public in January, sparking bipartisan concern about threats to the Fed’s independence. After months of controversy and legal challenges, the probe ended in April, but it left lasting questions about political pressure on central banks and the importance of protecting their independence.