Jerome Powell’s finally had enough of Donald Trump.
In an extraordinary statement accompanied by an on-camera address to the nation, Powell said Sunday evening that America’s perpetually beset monetary authority was served grand jury subpoenas by Pam Bondi’s Justice Department threatening a criminal indictment ostensibly in connection to Powell’s June congressional testimony regarding renovations to the Eccles building.
Those would be the renovations Trump cited during an absurdist summer pressure campaign aimed at ousting Powell over what The White House says are inexplicable cost overruns for a multi-year construction project.
To briefly recapitulate, this started early in July when Russ Vought described upgrades to the Fed’s headquarters in Baroque terms while smearing Powell on social media. Vought, known ignominiously as the principal author of Project 2025 and the proud villain of last year’s government shutdown, quickly moved to formalize the allegations in a letter alleging Powell misled Congress about the restoration effort.
Powell responded to Vought with a fact sheet about the project, knowing full well the kerfuffle had nothing to do with renovation costs — the administration’s point was to force Powell’s resignation or, failing that, conjure an excuse to fire him for cause. The next week, Trump showed up at the construction site where he and Powell, donning hard hats, engaged in an ad hoc, televised debate about the true cost of the renovations.
A few days later, Adriana Kugler resigned from the Fed board, freeing up a seat for Trump to fill. Shortly after that, at the urging of Bill Pulte, Trump moved to fire Lisa Cook for alleged mortgage fraud. Cook refused to leave and promptly sued the administration.
As the Fed embarked on a series of rate cuts, the renovations dispute faded into the background. Although Trump continued to menace Powell, most observers assumed The White House was content to wait him out given that his term as Fed chair expires in May.
I suppose we all should’ve known better, particularly given that Trump revived the idea of suing Powell late last month while regaling the media during a joint press conference with Benjamin Netanyahu.
That brings us to Sunday, Bondi’s threats and Powell’s breaking point. “No one — certainly not the chair of the Federal Reserve — is above the law, but this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said, of the subpoenas.
Then, and for the first time since Trump began berating the Fed in late 2018, Powell told the unvarnished truth about Trump’s unceasing derision. To wit:
This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are 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.
And there you have it. It finally happened. Powell finally reached the end of his rope with Trump.
Take a moment to let this sink in. The Chairman of the Federal Reserve has just called out, explicitly and publicly, a sitting US president for threatening to indict Fed officials on false pretenses in an effort to strong-arm monetary policy.
Powell wasn’t done. “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 went on, adding that “Public service sometimes requires standing firm in the face of threats.”
The battle is well and truly joined. Trump will respond, Bondi will press the issue and the Fed, apparently, with fight back.
Markets probably won’t like this, although given that Powell’s a lame duck anyway, I suppose it doesn’t make that much difference in terms of the policy trajectory. The story here is (obviously) Trump attempting to indict Powell and Powell reciprocating by indicting Trump in the court of public opinion.
Sad place we landed. Where do you think this ends?
Well, I think the main takeaway is that this is just more evidence to support the notion that America metamorphosed into an autocracy last year. It’s competitive autocracy in that Democrats will still be allowed to compete for power, but I don’t think anyone who’s any semblance of intelligence harbors any doubts anymore about where we are.
Is this the bias against rich, straight, white men that the Trump administration keeps talking about?
I think Trump will get more dictatorial and extremist, and make more reckless and ill-considered moves, as the midterms and his lame duck period approach. Speculation about the reasons is tempting but for prediction, the trendline is enough. All forms of risk premia should rise. This will be an interesting year, in the sense of the ancient Chinese curse. Most of us gathered around the Watercooler of H will survive, financially; some will thrive. But our peace of mind and our hearts may not be so fortunate. Good luck everyone.
Agree. The faster he crashes the faster he goes until….
Powell is the last man standing between Trump and his dream to fully commander all aspects of US policy. Amazing to witness a lawyer turned investment banker become the last bastion of the old system against full autocracy. I believe it is a courageous act from Powell, even if destined to be futile. The Chair has shown more integrity and respect for his institution than any member of Congress or the high court when it comes to Trump’s bullying.
+1
+1
I would like to see some gonad growth in congress and the senate. The executive branch needs cut down to size. Mad king donny won’t turn into a good guy by himself.
H-Man, it appears that Tillis will have Powell’s back covered by blocking all nominees during 2026 and if Powell doesn’t resign as a governor — another vote that would be independent of POTUS.
I went to boarding school starting in my freshman year in high school. I learned many important lessons that year. No matter how smart you think you are, many others are smarter. Even though I have eventually spent 50 years as an academic, been a fairly prolific researcher and a pretty good teacher of more than 12,500 students, I remain humble in the knowledge that even though I have accomplished many things I still don’t understand why the extra electricity doesn’t run out of the wall and onto the floor. Oh, and I still can’t win a proper chess game. I also learned that no matter what you have, millions have more. Same with power. Even when you learn how to use it someone is always better at it. No matter how you try to hide, it’s Rollo Thomasi who gets away with it. Finally, early in my life I leaned that lying is a very bad idea. There will be a day when djt, Prince of the Very Tiny Hands finally wakes up one last time and discovers all these truths. It will happen. I’m just glad I discovered them all at 13. It’s been such an important driver for my self image.
Mr. Lucky, with regard to your comment, “There will be a day when djt, Prince of the Very Tiny Hands finally wakes up one last time and discovers all these truths”- I must respectfully disagree.
In fact, I fully expect that djt’s narcissistic behavior will escalate over his remaining time. I’ve personally witnessed this in another human.