President Donald Trump signaled Thursday that he continues to support the Justice Department’s investigation into Federal Reserve Chairman Jerome Powell, a stance that could further delay the confirmation of Powell’s successor, Kevin Warsh.
President Trump said of Powell in the Oval Office, “He is under investigation because he is building a building that is costing hundreds of billions of dollars more than expected.”
He was referring to ongoing renovations to the Fed’s headquarters and another building in Washington that is the focus of a federal criminal investigation into the central bank chairman led by U.S. Attorney Jeanine Pirro.
President Trump has repeatedly claimed that the construction project will cost up to $4 billion, but that the actual total cost is approximately $2.5 billion.
Mr. Powell accused the government of launching the investigation in retaliation for Mr. Trump’s refusal to cut interest rates as quickly as he demanded.
“Mr. Powell should lower interest rates immediately,” Trump said in remarks from the Oval Office. “But he won’t do that, because he’s a bigot and an incompetent person, and that’s bad.” President Trump spoke to reporters before the bilateral meeting, sitting next to Prime Minister Sanae Takaichi.
Returning to the subject of the Federal Reserve Building, President Trump claimed that the multibillion-dollar price tag for the renovations indicates “criminal activity and possible contractor work.”
“So all I want to do is expose the public that this man may be an incompetent, very incompetent, dishonest man,” President Trump said.
The Federal Reserve declined to comment on President Trump’s recent comments about Powell.
In a scathing ruling last week, U.S. District Judge James Boasberg blocked subpoenas issued by a Washington grand jury as part of the investigation.
“Mountful evidence suggests that the government served these subpoenas on the (Fed) Board of Governors to pressure the Chairman to vote to lower interest rates or resign,” the judge wrote.
Pirro called the sentence “outrageous” and vowed to appeal.
Sen. Thom Tillis, RN.C., has repeatedly vowed to block Warsh’s nomination from passing the Senate Banking Committee until the Justice Department drops its investigation into Powell.
Warsh must be approved by a committee before the full Senate approves his nomination.
Mr. Tillis, who is not running for re-election, has said he likes Mr. Warsh, but argues that the investigation undermines the Fed’s long-standing independence from executive branch interference.
“You have no idea, realistically, what the market reaction would be if there was suddenly widespread recognition that the Fed chairman is serving at the pleasure of the president,” Tillis said last week.
Chairman Powell said Wednesday that he would not leave the Fed’s board until the investigation is “fully and truly concluded” with “transparency and finality.”
He also said he has not decided whether he will resign before the end of his term as governor, even if the investigation is resolved. A reporter’s question about Mr. Trump’s thoughts on the possibility of Mr. Powell staying on was the catalyst for the president’s rant.
“We haven’t made that decision yet,” Powell said. “I make decisions based on what I think is best for the facility and the people we serve.”
Powell’s term as Fed chair ends in May, but his term as Fed governor will continue until 2028.
— CNBC’s Alex Harring contributed to this report.
