Prosecutors working for Jeanine Pirro, the U.S. attorney for Washington, D.C., made an unannounced visit to the headquarters of the Federal Reserve on Tuesday. Three officials from Pirro’s office arrived at the Fed’s headquarters construction site in downtown Washington and said they wanted a “tour,” Robert Hur, the central bank’s outside counsel, told Pirro’s office in an email, which was seen by NBC News.
Pirro’s deputies also said they wanted to “check on progress” in the yearslong renovation of the Fed’s historic buildings overlooking the National Mall, Hur said. Hur indicated in his email Tuesday that investigators were turned away from the site. The attempted visit was first reported by The Wall Street Journal.
The surprise move by Pirro’s office came as its investigation into Fed Chairman Jerome Powell’s congressional testimony last year about the Fed’s renovation project has been rapidly losing steam. The probe first broke into public view in January, when Powell announced that subpoenas had been served to the central bank.
[…]
On March 13, Judge James Boasberg, the chief judge of the U.S. District Court for Washington, D.C., agreed with Powell. In a ruling, Boasberg blocked the subpoenas that Pirro’s office had served on the Fed, saying that “the Government has produced essentially zero evidence to suspect Chair Powell of a crime.”
On Tuesday, Hur pointed to Boasberg’s ruling in his email. “As you know, Chief Judge Boasberg has concluded that your interest in the Federal Reserve’s renovation project was pretextual,” he wrote. “Should you wish to challenge that finding, the courts provide an avenue for you; it is not appropriate for you to try to circumvent it.”
Pirro suggested in a statement Tuesday night that the investigators were justified in having tried to inspect the renovation project despite the judge’s ruling. “Any construction project that has cost overruns of almost 80% over the original construction budget deserves some serious review,” she said. “And these people are in charge of monetary policy in the United States?”
Oh have another glass of Two Buck Chuck and STFU, Jeanine.
I still can’t believe she’s the USAT for DC. It’s a joke but sadly par for the course. If there is a more obvious sign of the decline of our country than that, I don’t know what it is.
News of the unannounced visit by prosecutors comes as Trump has again threatened to fire Powell, if the Federal Reserve Chair decides to stay on the central bank’s governing board after his term as chair expires next month.
“Well then I’ll have to fire him, OK?” Trump said when reminded that Powell has said he won’t leave the Fed while the Justice Department investigates a $2.5 billion renovation project at the bank. Powell has also said he will remain as chair of the Fed’s rate-setting committee until a replacement is confirmed by the Senate, following the precedent of previous chairs.
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Trump’s threat to fire Powell comes as the Supreme Court is weighing the president’s effort to remove another central bank governor, Lisa Cook. Lower courts have so far allowed Cook to remain in her job while her legal challenge to the firing continues. The Supreme Court also seemed likely to keep her on the Fed when the court heard arguments in January. A decision could come any time.
The issue in Cook’s case is whether allegations of mortgage fraud, which she has denied, is a sufficient reason to fire her or a mere pretext masking Trump’s desire to exert more control over U.S. interest rate policy.
The Supreme Court has allowed the firings of the heads of other governmental agencies at the president’s discretion, with no claim that they did anything wrong, while also signaling that it is approaching the independence of the nation’s central bank more cautiously, calling the Fed “a uniquely structured, quasi-private entity.”
It’s hard to know exactly how the Supremes will come down on this but if I had to guess, this is likely to be one of the cases where they defy him, simply because it affects the economy directly and they seem to be at least a little bit concerned about how that might affect business.
Janet Yellen, an actual expert and former Treasury secretary, had some thoughts on Trump’s looney insistence on lowering interest rates at a time of rising inflation:
Speaking at HSBC’s Global Investment Summit in Hong Kong, Yellen sounded the alarm on monetary policy independence, saying that she has “never seen a threat of this level to the Fed before”. “How often does the president of a developed country express the view that the interest rate should be set to reduce the debt service cost?” she said. “This is what you hear in a banana republic.” Managing interest rates for the sake of the government budget, she said, has led to “hyperinflation” in such countries.
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She predicted that Trump’s nominee for Fed chair, Kevin Warsh, would struggle to establish “credibility” with colleagues on the Federal Open Market Committee if he argued that productivity gains from artificial intelligence justified lower interest rates.
Alongside other members of the administration, Warsh has compared the current macroeconomic moment to the 1990s, when Alan Greenspan, then the Fed chair, gambled on holding rates steady amid a productivity boost from the emerging IT sector.
“[Greenspan] looked at evidence in a different way than many economists do. But I think he was very much respected for his economic expertise on the FOMC. And people listened to what he said very respectfully and took it seriously.” “I don’t think that Warsh walks in with that level of credibility,” said Yellen, who participated in those debates as a Fed board governor from 1994 to 1997.
Warsh has a bit of a problem on his hands:
When asked by Fox Business’ Maria Bartiromo about Warsh’s chances in the Senate, Trump said, “We’re going to have to find out.” “He might not, but that’s why Thom Tillis is no longer a senator,” Trump said. “He quit.”
Tillis, despite announcing plans to retire from Congress at the end of his term this year, is still an active U.S. Senator and would have full voting rights if Warsh’s confirmation comes up for a vote before January 2027.
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Tillis’ beef isn’t with Warsh specifically — a point he has reiterated on several occasions — but with the DOJ’s investigation into Powell’s testimony last year about the Fed’s renovation of its two historic main buildings on the National Mall.
“I love the candidate. I won’t spend my five minutes [in committee] asking him about his credentials, because he has them,” Tillis said. “I’ll spend five minutes talking about a bogus investigation that’s going to cause me to vote no, unless they end the investigation.” “There’s no way to sugarcoat this,” he continued. “There’s one way out of the box, canyon, and they’ve got to decide whether or not they’re going to do it.”
Good luck Kevin. Jeanine is full speed ahead.