Federal Reserve Chair Jerome Powell may face legal scrutiny following a criminal referral made by Congresswoman Anna Paulina Luna.
Criminal Referral Against Jerome Powell
Congresswoman Luna sent a letter to the Justice Department, accusing Powell of giving false testimony before the Senate Banking Committee on June 25. She pointed out discrepancies in his statements regarding the additional cost of $600 million, claiming Powell lied that these changes were minor, which contradicts internal documents examined by congressional investigators.
Tension Between Powell and Trump
The criminal referral increases the tension between Powell and President Donald Trump, who has repeatedly called for significant interest rate cuts. Recent market forecasts indicate a 56.1% possibility of the Fed lowering rates in its upcoming meeting. Though Trump has considered firing Powell, he has stated he has no such intention. However, he mentioned Powell may resign under increasing legal or reputational pressure.
White House Denies Influence from Treasury Secretary
Reports from the Wall Street Journal indicated Treasury Secretary Scott Bessent influenced Trump not to dismiss Powell. Nonetheless, Trump publicly denied any such influence, asserting that he understands what is best for the market and the U.S. In a CNBC interview, Bessent did not fully endorse the Journal's account but reiterated that Trump consults various allies before making decisions.
The situation surrounding Jerome Powell illustrates the rising tension in the financial and political context of the U.S., potentially affecting his future career.
