Donald Trump spent much of 2025 publicly and privately lobbying his handpicked Federal Reserve chair, Jerome Powell, to lower interest rates. When the heavy-handed tactics didn’t have much of an effect, the president resorted to juvenile taunts and name-calling, publicly condemning Powell as (among many other things) a “moron” for failing to follow the White House’s misguided demands.
Two weeks ago, however, Trump’s position took a curious turn: He announced on Dec. 30 that his administration would “probably bring a lawsuit against” Powell.
That didn’t make a lot of sense — there were no grounds for such a case — but two weeks later, those comments became relevant anew. As it happens, the president didn’t bother pursuing some baseless civil suit against the Fed chair; instead, his team settled on a different legal tactic. The New York Times reported:
The U.S. attorney’s office in the District of Columbia has opened a criminal investigation into Jerome H. Powell, the Federal Reserve chair, over the central bank’s renovation of its Washington headquarters and whether Mr. Powell lied to Congress about the scope of the project, according to officials briefed on the situation.
The inquiry, which includes an analysis of Mr. Powell’s public statements and an examination of spending records, was approved in November by Jeanine Pirro, a longtime ally of President Trump who was appointed to run the office last year, the officials said.
Around the time the news started to reach the public, Powell issued a roughly two-minute video statement, speaking directly to the camera, confirming that Trump’s Justice Department on Friday had served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment.
Powell also explained the obvious motivation behind the developments: “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. 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.”
The chair’s statement represented the initial pushback against Team Trump’s gambit, but additional elements soon followed. On Wall Street, for example, stock market futures fell, the dollar weakened, gold prices spiked, and the Vix index (sometimes referred to in financial circles as the “panic index”) jumped.
Let’s not forget that last spring when Trump talked openly about possibly firing Powell, markets dropped and the president quickly backed off, claiming he hadn’t said what everyone heard him say.
As the president’s DOJ eyes possible trumped-up, bad-faith criminal charges against Powell, the circumstances are far worse.
A political backlash is brewing too. Democratic leaders wasted little time in condemning the developments, but the pushback wasn’t entirely partisan. Republican Sen. Thom Tillis of North Carolina, a member of the Senate Banking Committee, said in a statement, “If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question.”
Just as notably, the senator said he would “oppose the confirmation of any nominee for the Fed — including the upcoming Fed Chair vacancy — until this legal matter is fully resolved.”
But as important as these elements are, it’s worth appreciating the profound damage Trump and his team are doing to the rule of law as the dust settles on the news.
The White House hasn’t merely seized control of the Justice Department, it’s also embraced the idea that the levers of prosecutorial power are just another political tool to be used against those who bother Trump or get in his way. The list is long and growing. Trump has a problem with Minnesota Gov. Tim Walz? Prosecute him. New York Attorney General Letitia James tries to hold Trump accountable? Prosecute her. Former FBI Director James Comey upsets Trump? Prosecute him. Fed Governor Lisa Cook stands in the way of Trump’s agenda? Prosecute her. The obvious corruption of the justice system is made worse by the fact that the White House isn’t making any meaningful effort to hide the corruption. Trump doesn’t appear to be the least bit concerned about appearances or a pretense of propriety. He’s abusing the system. He knows he’s abusing the system. He knows that we know he’s abusing the system — but he’s doing it anyway. It’s easy to believe that Trump and his confederates aren’t hiding their weaponization of the criminal justice system because they want everyone to notice. They need federal officials and White House critics to be afraid, and other federal prosecutors to understand that they’ll soon be unemployed unless they play ball with the Republican agenda. The corruption is the point. There might be half-hearted denials, issued with winks and nods, but by design, everyone should be painfully aware of what is plainly true: The authoritarian crisis has arrived, and it’s getting worse. We now live in a country where the president’s opponents are pursued by prosecutors in brazen displays of partisan power. This post updates our related earlier coverage.
Steve Benen is a producer for "The Rachel Maddow Show," the editor of MaddowBlog and an MS NOW political contributor. He's also the bestselling author of "Ministry of Truth: Democracy, Reality, and the Republicans' War on the Recent Past."
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