On December 29, the president of the United States, Donald Trumppublicly stated that he “could” sue Jerome Powellpresident of the Federal Reserve Bank, known as the Fed (it is the name of the North American central bank) for “manifest incompetence.” Nobody suspected what was in his head. Trump. But last Friday, January 9, the Department of Justice reported that the Prosecutor’s Office was opening an investigation against Powell and other officials and who were summoned to testify before a grand jury about the cost of the rehabilitation works of two buildings that are part of the central bank complex, with a budget -2.5 billion dollars- that Trump has been considered excessive.
The first skirmish took place precisely last July, when Trump accompanied Powell to visit the works. Trump said the budget had risen to $3.1 billion while Powellat his side denied that the information was correct. Trump took out a paper with the figures from his jacket. But the chairman of the Federal Reserve did not budge.
Trump fulfills his threats. In Washington, the war Trump contra Powell It has been going on since the inauguration of the former’s new mandate. The mandate of Powell expires in May 2026. But Trump He doesn’t want to wait. And he wants to run the central bank directly through a trusted person. Strictly speaking, the appointment of Powell he did it Trump. It was during his first term in the White House, in 2018. But Powell He had already been a member of the bank’s Board since 2012.
Trump wants the Federal Reserve to reduce the price of the cost of money – short-term interest rates – at a faster pace to prevent a dip in household consumption demand in anticipation that 2026 will be an electoral year – the mid-term legislative elections are held next November – given that polls show him in recent weeks as one of the presidents with the lowest popularity index in the first year of office – January 2025 January 2026 – of the last years.
Trump and Powell during the Fed’s construction site visit. / AP
But what perhaps he did not calculate well Trump the thing is Powell I would go out and confront him directly. And much less would he personally accuse him of carrying out a judicial war using the pretext of the works at the Federal Reserve. Because, now, instead of assuming that the initiative is yours, Trump has told NBC that he knew nothing about the ongoing criminal proceedings.
“I have no idea. But certainly, [Powell] is not very good at the Fed and is not very good at building buildings,” he said last Sunday. The subpoenas issued by the grand jury, which involve a criminal investigation into Powell and other officials, claim that Powell did not tell the truth in his testimony before the Senate Banking Committee last June about the historic buildings currently underway.
“They are excuses”
In an official statement, from the Federal Reserve, Powell He got right to the point: “I have a deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chairman of the Federal Reserve, is above the law. This new threat is not about my testimony in June or the renovation of buildings. It is not about congressional oversight of the Federal Reserve. Those are pretexts. The threat of criminal action is a consequence of the Fed setting interest rates based on our best assessment of what will serve the public, rather than following the president’s preferences. [Trump]”.
The confrontation is frontal. It seems that given the display of his drunken power (attack on Venezuela and kidnapping of the president on January 3, threats of interventions in Greenland, Iran, Cuba and Colombia), Trump has chosen to advance the relief by four months and, above all, through a judicial war. Another possible interpretation is that Trump not only does he want to end Powell as president, but seeks to abort the possibility that after leaving the presidency he remains on the council, a right that entitles him, until 2028.
Within the Republican Party, voices have already emerged that, without sympathizing with Powellhave criticized Trump for rushing the operation. Trump has used the Department of Justice – as he promised in his election campaign – to settle scores with those he calls his enemies. He tried to do so, although without success, with a lawsuit against James Comeyformer police director, FBI; He achieved this with the resignation of the New York attorney general, Letitia Jamesand also against Lisa Cookan economist on the Fed board, whose case is about to be heard in the Supreme Court. Again, ‘lawfare’.
It’s the economy, stupid!
The economy, as is the norm, is at the center of Americans’ concerns with the obsession with so-called ‘affordability’, the concept that drove the victory of Zohran Mamdani in the mayor’s office of New York. That is to say: the lack of an affordable cost of living, the lack of affordable housing. In roman paladino: the North American economy is growing, but no one, except the richest, is aware of it. Data on inflation are expected this Tuesday, January 13, a circumstance that will lead to Trump to make speeches about factories and commerce in Detroit, Michigan.
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