Judge blocks justice department from subpoenaing Fed chair Jerome Powell

• Chief Judge James Boasberg stated the government produced 'essentially zero evidence to suspect Chair Powell of a crime' and concluded the justifications were pretextual
• Republican Senator Tom Tillis and other GOP senators opposed the investigation and Tillis vowed to vote against Trump's Fed chair nominee Kevin Warsh until Powell's case is resolved
• Powell's term as chair ends in May 2026, but his seat on the Federal Reserve Board technically runs until January 2028, leaving uncertainty about his future role

Summary

A federal judge blocked the Justice Department from subpoenaing Federal Reserve Chair Jerome Powell in an investigation ostensibly focused on the management of the central bank's renovation project. Chief Judge James Boasberg of the DC District Court ruled on Friday that a "mountain of evidence" indicated the inquiry was pretextual, aimed at pressuring Powell to lower interest rates or resign rather than investigating any legitimate crime.

Powell disclosed the surprise investigation on January 11, characterizing it as a threat to Fed independence and part of the Trump administration's efforts to influence monetary policy. The judge found the government produced "essentially zero evidence" of criminal wrongdoing by Powell.

Key Political Dynamics:

Republican Senator Tom Tillis, part of a small GOP group opposing the investigation, has pledged to vote against Trump's nomination of Kevin Warsh as the next Fed chair until Powell's case is resolved. Trump, who appointed Powell in 2018, has increasingly attacked the chair as "stupid" and "too slow" on rate cuts. Last summer, Trump accused Powell of "fraud" over budget overruns on Fed headquarters renovations, which Powell denied.

Additional Context:

Powell's term as chair ends in May, though his board seat technically runs until January 2028. Meanwhile, the Supreme Court is expected to rule by June on a separate case involving Fed Governor Lisa Cook, whom Trump attempted to fire over alleged mortgage fraud. Cook has denied the allegations, with her lawyers noting similar discrepancies by other officials, including Treasury Secretary Scott Bessent.

The rulings underscore ongoing tensions over Federal Reserve independence amid White House pressure for looser monetary policy.