United States President Donald Trump has denied any involvement in the justice department's criminal investigation into Jerome Powell, the head of the US Federal Reserve, as tensions escalate between the president and America's central bank.
The dispute intensified over the weekend after Powell said the justice department had opened a criminal investigation into whether he misled Congress over a costly renovation project at the Fed's Washington headquarters.
In a video statement, Powell publicly accused the Trump administration of political pressure and intimidation for the first time — marking a clear escalation of tensions.
But Trump said he knew nothing about the investigation.
"I don't know anything about it, but he's certainly not very good at the Fed, and he's not very good at building buildings," Trump said of Powell in an interview with NBC News on Sunday night.
What's behind the investigation into Powell?
The justice department says the investigation centres on an alleged "abuse of taxpayer dollars" related to the renovation of two historic buildings at the Federal Reserve's headquarters.
The project ran over its initial budget of US$1.9 billion ($2.8 billion) to about US$2.5 billion ($3.7 billion), with the Fed citing higher-than-expected labour and materials costs, design changes, and asbestos and lead contamination.
Trump has accused Powell of mismanagement and potential fraud, though he has not provided evidence.
Powell warns of political 'intimidation'
Powell suggested the renovation concerns were being used as a pretext to undermine the central bank's independence — the first time he has publicly accused the Trump administration of political intimidation.
"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," Powell said.
"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."
Three former Federal Reserve chairs — Janet Yellen, Ben Bernanke and Alan Greenspan — have condemned the justice department's move, warning it risks undermining the credibility of the central bank.
"This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly," they wrote in a joint statement.
Is it actually about renovations?
If Trump and Powell's history is anything to go by, the latest clash could be related to Trump's long-running frustration with the Federal Reserve's refusal to slash interest rates.
The independent central bank is tasked with keeping inflation under control, unemployment low, and the financial system stable.
Setting interest rates too high can slow economic growth by discouraging borrowing, while setting them too low can fuel inflation — a balancing act that central banks are meant to manage without political interference.
Trump, however, has repeatedly pushed the Fed to lower rates, at times calling for cuts as low as 1 per cent — levels typically reserved for economic crises.
He has also frequently attacked Powell personally, despite having appointed him to the role in 2017.
Last April, Trump said Powell's termination "cannot come fast enough". Just two weeks ago, amid renewed scrutiny of the renovation project, Trump said he would "love to fire" Powell, calling him an "absolute fool".
Powell's term as chair will end in May, but he could opt to remain on the board until 2028, delaying Trump's opportunity to nominate a replacement.
While past presidents have pressured the Federal Reserve to lower interest rates, none have ever publicly threatened to fire officials or target them with criminal charges, raising concerns that this latest dispute marks a significant escalation in the battle over the bank's independence.
— With additional reporting by Reuters.
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