U.S. court quashes subpoena to Fed, halting probe targeting Powell

[Financial News, New York – Reporter Lee Byung-chul] The Federal Court of the United States has quashed a subpoena that the United States Department of Justice (DOJ) issued to the Federal Reserve System (Fed), putting the brakes on a criminal investigation targeting Fed Chair Jerome Hayden Powell. The ruling is expected to have broad repercussions, as the judiciary effectively found that the probe into the Fed, which unfolded amid President Donald Trump’s pressure for interest rate cuts, was politically motivated.
According to the United States District Court for the District of Columbia on the 13th (local time), Judge James E. Boasberg ruled that two subpoenas the DOJ had issued to the Fed were improper and dismissed them.
The Wall Street Journal (WSJ) reported that Judge Boasberg wrote in his opinion, "There is ample evidence that the primary purpose of these subpoenas is to harass and pressure Chair Powell so that he will either yield to the President’s demands or resign."
The investigation into Jerome Hayden Powell began late last year, when federal prosecutors issued two subpoenas to the Board of Governors of the Federal Reserve System. The subpoenas sought records related to renovations of the Board’s headquarters building, as well as testimony and materials concerning brief remarks Powell made before Congress about those renovations.
Since the investigation began, Powell took the unusual step of publicly pushing back. In a video statement released on January 11, he argued that the probe was part of a political effort to pressure the Fed into cutting interest rates and to undermine the central bank’s independence.
The tensions between President Donald Trump and the Fed are drawing renewed attention, particularly because the judge explicitly characterized the purpose of the subpoenas as "pressure" in the ruling.
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pride@fnnews.com Reporter Lee Byung-chul Reporter